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JWG-IT publish report detailing liquidity risk business benefits


JWG-IT publish report detailing liquidity risk business benefits

Analysis outlines how banks can leverage 2009 regulatory change imperatives for profit

London – 22 May 2009.  JWG-IT, the neutral FS think-tank, today announced the availability of an analysis report which identifies the business benefits associated with the new liquidity risk management regime implementation currently being spearheaded by the FSA.  

Much of the liquidity risk management debate has been focused on the FSA’s data-hungry approach, tight timeframes and the cost estimates of over £2 billion[i]. This new report looks at the practical capabilities which banks must develop to comply with the new regime and explores the tangible business benefits that effective liquidity risk management could bring:

  • Better strategies.  Aggregated views and near-time visibility of liquid resource, means business decisions can be better informed and result in higher margin
  • Customer and market transparency.  With division heads and traders actively managing exposures and the cost of funds, margins will improve 
  • Early warning of holistic risks.  By joining the credit, market and operational risk views with liquidity risk views, banks will know more about the impact of events, quicker 
  • Better and cheaper capital buffers.  Smarter and more efficient strategies allow banks to reduce the amount of collateral required at the central bank  
  • Efficiency, visibility and control.  Operational costs can be reduced through better management of data which is proactively used by the board.

PJ Di Giammarino, CEO of JWG-IT, comments “The FSA has thrown down the gauntlet by telling banks they need to consider the ‘extreme but plausible’ liquidity scenarios that could bring them to their knees.  This challenge could serve as a real catalyst for the industry to get much closer to the holy grail of enterprise-wide intelligence.”

Di Giammarino continues “By having a holistic picture of the overall market, banks will be able to improve their bottom line.  As opposed to taking on another tick-box exercise, banks should be tackling fundamental operational challenges.  Liquidity risk management heralds a fundamental change.  Not only will it force an upgrade to the operating model, data management and technology infrastructures, it will modify business behaviours.”

 

Note to editors:

  • For more information on the business benefits associated with the liquidity risk management regime see www.liran.eu  for a summary of the 24-page report: “What if ... you could have heard the bubble bursting?”
  • JWG-IT has also produced a video on the business benefits of effective liquidity risk management entitled “What if ... you could have seen Lehman falling?”, which will be available to view on www.liran.eu
  • On 4 June, JWG-IT will be hosting a briefing on the bank’s business benefits of doing liquidity risk management right, entitled “What if… you could spot the next Lehman Brothers falling?”  See www.liran.eu for more details.
  • The Capital Markets Chamber, hosted by The Financial Services Club and JWG-IT, will be holding a debate on 9 June 2009 entitled This house believes new liquid architectures will dominate strategic plans for 2010’.  To register for the event, please visit http://www.fsclub.co.uk/events-09.cfm

About JWG-IT Group Limited
JWG-IT is the only financial services industry think-tank to facilitate collaborative work to resolve industry issues created by regulatory change.  Based on a working model started in 2005, JWG-IT has established strong relationships with EU administrators, leading firms and companies.  It is neither lobbyist nor consultancy and revenues are restricted to membership and event fees and content sales.  The JWG-IT Think-Tank is designed to help members and participants manage regulatory-driven change better, quicker, cheaper and with less risk.  JWG-IT launched the customer data management group and the liquidity risk action network in 2008.  For more information, see www.jwg-it.eu.

For Immediate Release
Business contact: PJ Di Giammarino, pj@jwg-it.eu, +44 7811 430 503
Media contact: Louisa Excell, louisa.excell@hotwirepr.com +44 20 7608 2500

 

 


 

[i] For more information on the FSA’s cost estimate see JWG-IT’s 20 April member alert: http://www.jwg-it.eu/PR-FSA-2bn



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