Intraday Day Liquidity Management

Intraday liquidity refers to the funds available with the bank or a financial institution during the business day for the purpose of making payments in real time.

The Basel Committee has been working on developing a set of monitoring indicators that will allow banking supervisors to monitor a bank's intraday liquidity risk management. They have proposed a consultative document on the same - Monitoring Indicators for Intraday liquidity Management. It is also expected that these indicators will eventually allow supervisors to understand the bank's payment and settlement behavior and how they manage their intraday liquidity risk.

This is based on the Principal 8 of the Sound Principles published by Basel Committee (Principles for Sound Liquidity Risk Management and Supervision). According to this principle:

"A bank should actively manage its intraday liquidity positions and risks to meet payment and settlement obligations on a timely basis under both normal and stressed conditions and thus contribute to the smooth functioning of payment and settlement systems.”

There are eight proposed indicators:

  1. Daily maximum liquidity requirement
  2. Available intraday liquidity
  3. Total payments
  4. Time-specific and other critical obligations
  5. Value of customer payments made on behalf of financial institution customers
  6. Intraday credit lines extended to financial institution customers
  7. Timing of intraday payments
  8. Intraday throughput

The complete document can be read below:

[gview file="http://www.bis.org/publ/bcbs225.pdf" width="600" save="1"]

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