Capital markets platform provider Calypso Technology has launched a liquidity management solution that enables global banks and other financial institutions to comply with Basel III capital adequacy standards. The treasury system provides intraday, short- and long-term liquidity management capabilities and extensive cash management functionality, allowing institutions to address the Basel III liquidity requirements.
Calypso says that the solution addresses two key challenges facing treasuries today when managing and forecasting liquidity.
- The ability to aggregate cash flows and data from multiple systems and/or business units.
- Ensuring that the system can capture trade and cash flow data from various sources through its robust interfaces.
Another major differentiating benefit is the system’s ability to model all asset classes, including cash and derivatives products, or integrate custom pricing models so that managers can perform market data calculations or simulate behavioural assumptions into business as usual (BAU) or stressed scenarios.
Calypso is promoting the single platform as offering treasurers the ability to manage enterprise concerns such as survival horizon, asset liability distortion and intraday liquidity usage. Apart from producing the required metrics – namely liquidity coverage ratio (LCR), net stable funding ratio (NSFR), credit line usage ratio, asset maturity mismatches and funding concentration – it also allows the treasury to understand the key significant currencies by running balance sheets at a currency level.
The flexibility and the architecture of the system aim to enable organisations to align their risk management objectives to the reporting duties required by the Basel III principles. The scenario engine tests stressed banking products, capital market products and collateral positions. It also enables smooth management of liquidity risk, both operational and regulatory. The real-time access to nostro and custody positions allows the survival management and intraday liquidity working off the same data. And with the inventory of the group in its views, the treasury can allocate and manage liquid assets more effectively.
“As Basel III is implemented over the next few years, the mandate will continue to evolve with increased emphasis on firm-wide risk management and capital planning,” said David Little, Calypso’s director of strategy and business development. “Our new solution enables treasurers to comply and manage enterprise concerns. Treasurers and chief technology officers [CTOs] now have a comprehensive, cross-asset bank treasury system that can help manage all internal and external funding activities and provide real-time assessment of liquidity risks within balance sheets.”
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