Deutsche Bank Calls For Industry Collaboration On Real-Time Liquidity Management Framework

Published 

London, Frankfurt am Main – Banks and corporates alike stand to benefit from real-time liquidity management functionality, but, industry-wide collaboration will be crucial to ensure effective implementation, according to a new Deutsche Bank’s white paper entitled “Preparing for real-time liquidity”.

The paper – which includes insight from Sandra Laielli, Chair, Liquidity Working Group, Bankers Association for Finance and Trade; Philip Stewart, Global Head of Cash and Banking, British American Tobacco; Hays Littlejohn, CEO, EBA CLEARING; Christian Mnich, Senior Director, Solution Management, Working Capital & Treasury Management, SAP; and Harry Newman, Head of Banking, SWIFT – argues that a standardised real-time treasury framework would enable banks to provide a range of value-added services. These include, real-time currency conversion and hedging, instant cash concentration solutions, intraday cash pooling and optimised short-term investments.

These developments come on the back of significant momentum for application programming interfaces (APIs) and real-time payments, which have proliferated worldwide – prompting a knock-on effect for liquidity.

“Real-time clearing and settlement mechanisms, which will become quite distinct from the familiar territory of cut-off times, end-of-day processing, and periodic updates to intraday liquidity positions, will have a fundamental impact on liquidity and collateral management,” says Vanessa Manning, Head of Liquidity and Investment Solutions, Global Transaction Banking, Deutsche Bank. “For example, the way that banks calculate their intraday liquidity buffers is currently based around end-of-day batch processing, and does not necessarily reflect the different risks associated with real-time flows and dynamic intraday liquidity due to the speed of liquidity changes and associated counterparty exposures.”

Consequently, if the industry is to reap the benefits of real-time liquidity management, banks will need to transform their clearing and settlement architecture, help corporates develop their own real-time-ready systems, and collaborate with TMS and ERP vendors to ensure complete end-to-end efficiency of operational processes.

“The first step to achieving real-time liquidity capabilities will be industry-wide conversation, be it through forums, advocacy or continued dialogue with regulatory bodies”, says Manning. “Only then will the industry be able to collectively define the standards and best practices that will shape the next generation of liquidity and collateral management.”

 

To read “Preparing for real-time liquidity” please click here.

Most recent episodes

Future Monetary Policy Path Sets Markets Against Central Banks

Welcome to the latest edition of Liquidity Link Live, your exclusive market analysis provided by Northern Trust Asset Management.

05:19

Podcast - Journeys to Treasury Deep-Dive: Cash Flow Hedge Accounting at JT Group

Listen to this audible case study, which provides a lens over the details of a recent cash flow hedge accounting project undertaking by the JT Group treasury team.

33:38

Podcast - Innovation as an Enabler: Sustaining Global Trade Finance in Uncertain Times

J.P. Morgan's Bayo Osolake, who joins Eleanor Hill (TMI) to discuss how treasurers can facilitate global trade in the currently turbulent macroeconomic environment.

13:07

Relative Normality On Horizon — But Divergent Monetary Policy Pathways Likely

Welcome to the latest edition of Liquidity Link Live, your exclusive market analysis provided by Northern Trust Asset Management.

06:34

Audio TMI - MMF Reform Proposals Threaten LVNAV Viability for European Treasurers

Proposed MMF changes currently being debated at European Commission level endanger the utility of one of the most popular forms of MMF used by corporate investors across the continent.

Audio TMI - Special FX

Two experts from NatWest share the inside track on how treasurers can better manage FX risks by shaking up legacy processes and old-fashioned thinking, improving data coll...

15:27

Audio TMI - Roadmap Towards a First-Class Group Treasury

As the perennial debate continues around the pros and cons of a centralised tre...

12:28

Audio TMI - How Etihad Covered all Three ESG Elements in One Sustainability-Linked Financing

Etihad Airways recently raised US$1.2bn in the first sustainability-linked loan in global aviation with terms that relate to all three areas of ESG.

13:26

Reducing Friction in International Payments: Five Steps for Treasury Teams

What are the steps that treasury teams can take to remove roadblocks in processing international payments? Daniela Eder, Gibran Maqsood, and Karsten Becker (Barclays) to answer this question.

30:31

Keeping the Plates Spinning: the Art of Treasury Project Management

Sandra Shen (Actualize Consulting) joins TMI's Tom Alford to offer professional insight into what defines successful treasury project management. 

18:27