Liquidity Calculations & Reporting Overview
AxiomSL’s flexible, integrated, data-driven platform delivers a solution for Liquidity Risk Management and Regulatory Reporting for financial institutions to meet multiple regulatory reporting requirements while ensuring full transparency and control. Unique in its ability to drill down, automate workflows and review reports to original data sources, it empowers clients to successfully monitor risk and eliminate errors that can often occur through manual processes. The platform delivers complete data lineage as well as data enrichment, integrity, traceability and full transparency throughout the entire process with increased efficiency and time to market.
Unified Data Model
One of the strengths of AxiomSL’s liquidity solution is its robust Unified Data Model (UDM) which standardizes key metrics around the Institution’s global positions, contracts, collateral and cash flows. Combined with a comprehensive Liquidity Risk Engine, AxiomSL’s Liquidity Solution is designed to scale for current and future regulatory and internal compliance monitoring and reporting. For example in the United States, AxiomSL delivers an integrated FR 2052a/LCR solution that leverages the core UDM data set and produces both the Liquidity Coverage Ratio and the FR 2052a (formerly 5G) report with consistency and transparency from the source through the output reports. AxiomSL has also integrated the BCBS standard Net Stable Funding Ration (NSFR) calculations into the Liquidity Solution.
ControllerView Data Flow Diagram
Liquidity Risk Background
Transparency – The current regulatory requirement of intra-day monitoring for liquidity risk requires a leap increase in transparency from previous reporting. Without a system for transparency coupled with stringent timeframes banks significantly run the risk of creating unreliable and non-reconciling monitoring and reporting systems. In addition, they also risk missing the implementation deadlines. This demands a process that can easily monitor reconciliation issues across management systems and trace transactions to their source efficiently.
Disparate Source Systems – TThe key challenge for liquidity management lies in implementing a data management solution to integrate source systems across multiple jurisdictions and business lines to meet the demands of a highly complex regulatory environment.
Centralized Capital Allocation – ALM and treasury operations are obliged to look for ways to improve effectiveness by monitoring and analyzing the impact on liquidity requirements across business lines and allocating funding costs accurately.
Robust, Automated Integrated Platform – The financial crisis also highlighted that many banks are too reliant on manual processes. This makes it challenging to respond effectively to the demands of a rapidly changing regulatory environment, creating spider-webs of standalone tools. Stress testing increases the demands on the liquidity systems and processes even further. A far more robust, automated integrated platform is required to ensure a flexible and controlled liquidity risk monitoring process.
Enhance Visibility Across Silos – Financial institutions need a robust liquidity risk management solution that links silo departments. This allows operational teams to quickly analyze and perform stress tests, ensuring sufficient liquidity needs and allowing organizations to absorb shocks arising from financial and economic stress.
Liquidity Risk Features
Strategic data-driven solution with complete transparency, drill down and clear audit trail which Interfaces with clients existing business systems and processes.
Controls the entire liquidity risk management process, from data sourcing to reporting, including XBRL submission.
Able to adapt to changes across institutions, geographies and jurisdictions without system re-engineering or source data reconfiguration.
Enables analysis and adjustment of pre-submission results to ensure accuracy prior to submission.
Use of visual data modelling and business rules make modifications simple and fast.
Drilldown functionality supports instant verification of aggregate numbers down to record levels for improved transparency.
Accommodates current and future compliance and reporting needs in a timely and efficient manner.
Empowers clients with a flexible, transparent, auditable and performance-driven product.
Delivers a single global platform that accommodates multi-jurisdictional and multi-faceted reporting requirements.
A well-managed and documented liquidity risk management process will yield real capital benefits.
Liquidity Risk Additional Benefits
LCR & NSFR calculator
Aggregation of LCR compliance Entities and Consolidated Parent
Aggregation of Liquidity Measures by Business Unit hierarchies
Variance & trend analysis
Cash flow generation engine
Liquidity and capital stress testing
AxiomSL solution for:
Net Stable Funding Ratio (NSFR)
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