Liquidity Coverage Ratio (LCR)

Enables FIs to utilize the liquidity ecosystem to efficiently calculate LCR accurately and on a timely basis with trusted data

Overview


Device Frame
Frequent Quantitative Disclosure

Calculating the liquidity coverage ratio (LCR) accurately and on a timely basis poses a significant challenge for all financial institutions (FIs) because of the:

  • Need to manage huge volumes of daily data for compliance monitoring and daily, monthly, and quarterly average liquidity reporting
  • Need for adequate controls and transparency of data from source to process to results

  • Burden to report correctly and more frequently while relying upon many unsustainable manual processes and in the face of shrinking resources
  • Changing volume of financial products and conditions of funding markets

The above factors are forcing FIs to reevaluate their approach to meeting liquidity-reporting challenges.

Questions to Consider

  • Do we have a single core liquidity engine to create, execute, store, view, and report the complete and transparent rules for classification and computation?
  • Can we apply different run-offs or roll-overs to all cash and collateral in- and out-flows if LCR regulatory requirements change?
  • If required, are we able to calculate LCR more frequently in periods of market or economic stress?
  • Do we have adequate internal LCR measurement monitoring and reporting capabilities?

  • Do we have confidence that our data is complete and accurate so that LCR is a trusted value when senior executives, our board directors, regulators, and investors see them?
  • Do we have access to all the data that we need to calculate LCR promptly and accurately?
  • Can we apply different haircuts to high-quality liquid assets (HQLA) if LCR regulatory requirements change?
  • Do we have adequate data and process controls and transparency of data from source to process to results?

Solution

Holistic Liquidity Ecosystem

AxiomSL’s liquidity ecosystem empowers FIs to use their trusted liquidity data to deliver LCR and other regulatory reporting and to derive compelling analytic benefits.

Powerful Modules

The solution incorporates the powerful modules:

  • AxiomSL’s LCR disclosure module enables compliance by calculating the averages and producing the quantitative disclosure template
  • The solution runs on ControllerView®, AxiomSL’s data integrity and control platform

  • The LCR logic module delivers High Quality Liquid Assets (HQLA), cash outflows and inflows along with LCR rule categories and regulatory-required LCR value

Device Frame

AxiomSL’s Liquidity Risk Management Ecosystem

Use trusted liquidity data to deliver LCR to the Federal Reserve while deriving analytic benefits for the firm.

AxiomSL’s Liquidity Risk Management Ecosystem

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For more information about AxiomSL’s U.S. Liquidity Solution, download the PDF.

Benefits

With liquidity data, models, and calculations in one place, FIs can efficiently submit FR 2052a

Positions FIs to evolve with the changing liquidity regulatory landscape

Delivers trusted analytics and historical perspective

By sourcing liquidity data once, FIs can use it for multiple risk and reporting requirements and downstream analytics

Provides traceability to methods, parameters, and source data in a controlled, single platform environment

LCR Dashboard Module

Leveraging the LCR dashboard module to observe and interrogate, the FI can dig deep into its LCR trends as illustrated here.

AxiomSL’s Liquidity Risk Management Ecosystem

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