Intraday liquidity reporting guidelines agreed

Bounce back from China’s Black Monday

SWIFT said that the Payments Market Practice Group (PMPG) has endorsed the use of its messages for intraday liquidity reporting, as required by the Basel Committee on Banking Supervision (BCBS).

The financial messaging services provider added that messages for intraday liquidity reporting underpin a rulebook created by the Liquidity Implementation Task Force (LITF) to support compliance with BCBS requirements. Following community-wide consultation, the PMPG has made the decision to endorse the LITF guidelines, helping to ensure broad industry adoption.

“The LITF Global Market Practice Guidelines address challenges related to the data collection to comply with BCBS 248, which calls for banks to implement monitoring tools for intraday liquidity management by January 2017,” announced SWIFT

“The tools require banks to report retrospectively on their intraday liquidity flows. It is expected that more national regulators will request their banking communities to provide evidence that they manage their liquidity flows in real-time.

“To support the BCBS 248 requirements, SWIFT’s reporting messages are the predominant source of data,” commented Michael Knorr, head of payments and liquidity risk management at Wells Fargo and a PMPG member. “Having a very clear best practice on the use of intraday reporting messages is an essential tool that will enable banks to collect the necessary data in support of the regulatory requirements across different jurisdictions.

“The PMPG provides a truly global forum to drive better market practices. [Its] endorsement of these guidelines should provide the right vehicle for the banking community to use as a common reference enhancing current intraday reporting services.”

The LITF, an industry group of 25 large clearing banks, custodian banks and global brokers, has developed with the support of SWIFT a rulebook that includes Global Market Practice Guidelines for Intraday Liquidity Reporting. They to establish a common set of global best practices in the Nostro and Custodian space for the use of SWIFT intraday liquidity reporting messages, to help alleviate the four most common issues:

  1. Too few transactions reported on a real-time basis, especially in the Nostro space.
  2. Lack of timeliness of reporting
  3. Lack of granularity of information provided and more specifically the lack of “time stamped” information
  4. Lack of common definition and business practice of the current message types commonly used by the industry (FIN Cat9 messages).

“The industry wide effort to streamline intraday liquidity reporting is an exciting business evolution,” says Catherine Banneux, senior market manager, banking, SWIFT. “Since the publication of the BCBS monitoring tools, SWIFT has seen a 30% increase in its liquidity reporting messages. We expect the Guidelines, along with the support of the PMPG, to help increase usage and close the remaining data gaps.”

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