A Major Financial Institution’s LCR Rule Success Story

To monitor each firms’ liquidity profile and risks and liquidity coverage ratio (LCR) rule compliance, the Federal Reserve (Fed) requires financial institutions to submit liquidity positions for their global footprints through FR 2052a, the Complex Institution Liquidity Monitoring Report.

FR 2052a produces LCR and its source and results data to satisfy Basel liquidity requirements such as the Fed’s LCR rule for Public Disclosure, FR Y-15 Schedule G, and Reg.YY liquidity stress testing. Compliance is a significant and complex undertaking, and more so for firms grappling with onboarding new regulations during the COVID-19 crisis.

AxiomSL’s liquidity risk ecosystem empowered a financial institution with trusted liquidity data for its LCR rule reporting A prominent financial institution struggled to wrangle and report hordes of data from across the enterprise and reconcile FR 2052a’s resulting LCR with the LCR it was already calculating. Treasury had been calculating LCR for years, while regulatory reporting owned the new FR 2052a reporting and dictated its requirements. Complications arose when the LCR automatically resulting from FR 2052a differed from the firm’s existing LCR calculation by an amount far exceeding the Fed’s baseline.

Unable to reconcile the difference, the organization tapped AxiomSL for help. In collaboration, the client allowed its source data to be ingested into AxiomSL’s U.S. liquidity risk management solution on the ControllerView® data integrity and control platform. With transparent access to its crucial shared data, the client was able to configure and map its data to best suit its business mix and approach to stress-testing compliance.

The client used the solution’s reconciliation capabilities to discern the data and parameters influencing its LCR to eliminate the difference between its treasury and regulatory LCR results. Forging a bridge between these distinct functional areas, it successfully reported FR 2052a and a defensible LCR.

Read more about how AxiomSL’s U.S. liquidity risk monitoring and reporting ecosystem empowered this major financial institution with trusted liquidity data for LCR rule regulatory reporting and analytic benefits:

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