Our latest analysis of readiness and maturity of intraday liquidity management shows that many financial institutions run the risk not to meet payment and settlement obligations, if they don’t manage their intraday liquidity effectively. There are ways to make up for the necessary investments to that end by optimizing the intraday liquidity management.
This analysis provides an overview of the top trends in the commercial banking sector as they shift to technology high gear to boost client efficiency and battle a volatile, uncertain, competitive, and evolving landscape.
First, it was retail banking. Now, advanced technology is shifting to – and disrupting − the commercial banking space. Many commercial banks, known for paperwork, red tape, and branch dependency, were unprepared to support clients during their post-COVID-19 ramp-up. But now, the digital pivot to new mindsets, partnerships, and processes is in overdrive.
As commercial banks grapple with competition from FinTechs, BigTechs, and alternative lenders, their inability
to fulfill SME demands and pandemic after-shocks necessitates transformative process changes and a move
to experiential, sustainable, and inclusive banking models. We expect banks to strive to meet the demands
of corporate clients and SMEs by digitally transforming critical workflows and improving client experience.
Additionally, incremental process improvements in the middle and back-office that leverage intelligent
automation will keep the competition at bay because engaged clients are loyal.
Adopting newer methods to mine data and moving to as-a-Service models will prepare commercial banks
to flexibly respond to newcomers and find ways to co-exist through effective collaboration. The time has come for commercial banks to put transformation on the fast track as lending losses in wallet and market share could spill over to other functions!
How incumbents react and respond to 2022 trends could determine their relevancy and resiliency in the years ahead.
(1) Diversified Funding: Problems with Steering Towards Long-Term Stable Funding; (2) Analysing the Best Internal Mechanism for Managing new Liquidity Requirements
This analysis provides an overview of the top trends in the commercial banking sector as they shift to technology high gear to boost client efficiency and battle a volatile, uncertain, competitive, and evolving landscape.
First, it was retail banking. Now, advanced technology is shifting to – and disrupting − the commercial banking space. Many commercial banks, known for paperwork, red tape, and branch dependency, were unprepared to support clients during their post-COVID-19 ramp-up. But now, the digital pivot to new mindsets, partnerships, and processes is in overdrive.
As commercial banks grapple with competition from FinTechs, BigTechs, and alternative lenders, their inability
to fulfill SME demands and pandemic after-shocks necessitates transformative process changes and a move
to experiential, sustainable, and inclusive banking models. We expect banks to strive to meet the demands
of corporate clients and SMEs by digitally transforming critical workflows and improving client experience.
Additionally, incremental process improvements in the middle and back-office that leverage intelligent
automation will keep the competition at bay because engaged clients are loyal.
Adopting newer methods to mine data and moving to as-a-Service models will prepare commercial banks
to flexibly respond to newcomers and find ways to co-exist through effective collaboration. The time has come for commercial banks to put transformation on the fast track as lending losses in wallet and market share could spill over to other functions!
How incumbents react and respond to 2022 trends could determine their relevancy and resiliency in the years ahead.
(1) Diversified Funding: Problems with Steering Towards Long-Term Stable Funding; (2) Analysing the Best Internal Mechanism for Managing new Liquidity Requirements
This presentation provides complete study ofcredit risk management,how it was performed in yester years ,how it is taken care nowadays and what is the road ahead in future
Asset Liability Management and Risk Management over laps each other on many grounds, they are the two very important concepts of the study of Financial Systems.
Asset liability management (ALM) can be defined as the comprehensive and dynamic framework for measuring, monitoring and managing the financial risks associated with changing interest rates, foreign exchange rates and other factors that can affect the organisation’s liquidity.
OTC Collateralisation : implementations issues in the context of CVA & FVA
- The ideal CSA hypothesis : Imperfect collateralisation for credit mitigation and/or funding
- FVA vs. CSA-discounting
- Implications in terms of curves calibrations and management
- FVA for Cleared positions
- FVA or CSA-discounting : which funding management model?
This presentation is the one stop point to learn about Basel Norms in the Banking
This is the most comprehensive presentation on Risk Management in Banks and Basel Norms. It presents in details the evolution of Basel Norms right form Pre Basel area till implementation of Basel III in 2019 along with factors and reason for shifting of Basel I to II and finally to III.
Links to Video's in the presentation
Risk Management in Banks
https://www.youtube.com/watch?v=fZ5_V4RW5pE
Tier 1 Capital
http://www.investopedia.com/terms/t/tier1capital.asp
Tier 2 Capital
http://www.investopedia.com/terms/t/tier2capital.asp
Basel I
http://www.investopedia.com/terms/b/basel_i.asp
Capital Adequacy Ratio
http://www.investopedia.com/terms/c/capitaladequacyratio.asp
Basel II
http://www.investopedia.com/video/play/what-basel-ii/?header_alt=c
Basel III
http://www.investopedia.com/terms/b/basell-iii.asp
RBI Governor - Raghuram G Rajan on the importance if Basel III regulations
https://youtu.be/EN27ZRe_28A
PSD2 is finally here and 2018 is turning out to be a big year for the banking industry as financial institutions open their APIs and make them available to third-party providers.
Find out what Kony is doing about Open Banking and Kony PSD2 solution.
Members :: Treasury Consulting LLP Pleased to Present Presentation covering - Treasury Management Systems (TMS) - Calypso. Presentation would be covering all aspects of Calypso like Front Office Desk , Middle Office Desk , Back Office Desk and Risk Office. Video also covering role of Pricers in the Calypso.
You are most welcome to connect with us at 91-9899242978 , Rahul.magan@treasuryconsulting.in or www.treasuryconsulting.in
Collateral Management and Market Developments - WhitepaperNIIT Technologies
The paper provides a broader view on how technology bridges the gap and also enumerates the best practices that financial institutions must follow to improve collateral management process.
RSE : le Medef et EcoVadis publient un guide pratique pour accompagner les PMEAdm Medef
Les entreprises sont aujourd’hui face à de profondes transformations, à la fois dans leur environnement naturel, économique et financier, industriel et humain, sociétal et règlementaire. Elles ont pris acte de cette évolution qui, loin de traduire un effet de mode, ne cesse de s’accentuer. Face à ces bouleversements, la RSE est un des leviers que peut utiliser le chef d’entreprise pour développer des solutions à même d’y répondre.
Les TPE, PME et ETI sont directement concernées. Faire le choix de la RSE est, pour elles, le moyen de répondre à une demande croissante de leurs parties prenantes. S’engager dans la voie de la RSE est un pari gagnant puisqu’une étude de France Stratégie montre que l’écart de performance entre les entreprises qui introduisent des pratiques RSE et celles qui ne le font pas est en moyenne de 13 %.
Néanmoins, des efforts restent à faire pour favoriser le large déploiement des pratiques responsables. Pour cela, le Medef et EcoVadis se sont associés pour publier un guide pratique visant à aider concrètement les TPE-PME à mettre en place une démarche RSE.
Ce guide, composé de 10 témoignages de terrain détaillant chacun une bonne pratique, a été conçu pour donner à tous les chefs d’entreprise de TPE-PME de nouvelles idées d’actions à mettre en œuvre. Les exemples choisis sont autant de bonnes pratiques mises en œuvre dans des secteurs d’activité variés. Elles ne sont pas nécessairement transposables et généralisables en l’état à toutes les entreprises, mais doivent être prises comme des sources d’inspiration.
Lean Startup Day - Atelier - Ce que veulent vraiment vos clients - Les probl...Pragmatic Giraffe
ATELIER PRATIQUE sur Comment faire du customer development et des problems interviews (Running Lean de Ash Maurya) pour construire le produit que votre client va acheter.
Lean Startup Day Paris 2017 - 1ère journée de rencontre autour du Lean Startup.
This presentation provides complete study ofcredit risk management,how it was performed in yester years ,how it is taken care nowadays and what is the road ahead in future
Asset Liability Management and Risk Management over laps each other on many grounds, they are the two very important concepts of the study of Financial Systems.
Asset liability management (ALM) can be defined as the comprehensive and dynamic framework for measuring, monitoring and managing the financial risks associated with changing interest rates, foreign exchange rates and other factors that can affect the organisation’s liquidity.
OTC Collateralisation : implementations issues in the context of CVA & FVA
- The ideal CSA hypothesis : Imperfect collateralisation for credit mitigation and/or funding
- FVA vs. CSA-discounting
- Implications in terms of curves calibrations and management
- FVA for Cleared positions
- FVA or CSA-discounting : which funding management model?
This presentation is the one stop point to learn about Basel Norms in the Banking
This is the most comprehensive presentation on Risk Management in Banks and Basel Norms. It presents in details the evolution of Basel Norms right form Pre Basel area till implementation of Basel III in 2019 along with factors and reason for shifting of Basel I to II and finally to III.
Links to Video's in the presentation
Risk Management in Banks
https://www.youtube.com/watch?v=fZ5_V4RW5pE
Tier 1 Capital
http://www.investopedia.com/terms/t/tier1capital.asp
Tier 2 Capital
http://www.investopedia.com/terms/t/tier2capital.asp
Basel I
http://www.investopedia.com/terms/b/basel_i.asp
Capital Adequacy Ratio
http://www.investopedia.com/terms/c/capitaladequacyratio.asp
Basel II
http://www.investopedia.com/video/play/what-basel-ii/?header_alt=c
Basel III
http://www.investopedia.com/terms/b/basell-iii.asp
RBI Governor - Raghuram G Rajan on the importance if Basel III regulations
https://youtu.be/EN27ZRe_28A
PSD2 is finally here and 2018 is turning out to be a big year for the banking industry as financial institutions open their APIs and make them available to third-party providers.
Find out what Kony is doing about Open Banking and Kony PSD2 solution.
Members :: Treasury Consulting LLP Pleased to Present Presentation covering - Treasury Management Systems (TMS) - Calypso. Presentation would be covering all aspects of Calypso like Front Office Desk , Middle Office Desk , Back Office Desk and Risk Office. Video also covering role of Pricers in the Calypso.
You are most welcome to connect with us at 91-9899242978 , Rahul.magan@treasuryconsulting.in or www.treasuryconsulting.in
Collateral Management and Market Developments - WhitepaperNIIT Technologies
The paper provides a broader view on how technology bridges the gap and also enumerates the best practices that financial institutions must follow to improve collateral management process.
RSE : le Medef et EcoVadis publient un guide pratique pour accompagner les PMEAdm Medef
Les entreprises sont aujourd’hui face à de profondes transformations, à la fois dans leur environnement naturel, économique et financier, industriel et humain, sociétal et règlementaire. Elles ont pris acte de cette évolution qui, loin de traduire un effet de mode, ne cesse de s’accentuer. Face à ces bouleversements, la RSE est un des leviers que peut utiliser le chef d’entreprise pour développer des solutions à même d’y répondre.
Les TPE, PME et ETI sont directement concernées. Faire le choix de la RSE est, pour elles, le moyen de répondre à une demande croissante de leurs parties prenantes. S’engager dans la voie de la RSE est un pari gagnant puisqu’une étude de France Stratégie montre que l’écart de performance entre les entreprises qui introduisent des pratiques RSE et celles qui ne le font pas est en moyenne de 13 %.
Néanmoins, des efforts restent à faire pour favoriser le large déploiement des pratiques responsables. Pour cela, le Medef et EcoVadis se sont associés pour publier un guide pratique visant à aider concrètement les TPE-PME à mettre en place une démarche RSE.
Ce guide, composé de 10 témoignages de terrain détaillant chacun une bonne pratique, a été conçu pour donner à tous les chefs d’entreprise de TPE-PME de nouvelles idées d’actions à mettre en œuvre. Les exemples choisis sont autant de bonnes pratiques mises en œuvre dans des secteurs d’activité variés. Elles ne sont pas nécessairement transposables et généralisables en l’état à toutes les entreprises, mais doivent être prises comme des sources d’inspiration.
Lean Startup Day - Atelier - Ce que veulent vraiment vos clients - Les probl...Pragmatic Giraffe
ATELIER PRATIQUE sur Comment faire du customer development et des problems interviews (Running Lean de Ash Maurya) pour construire le produit que votre client va acheter.
Lean Startup Day Paris 2017 - 1ère journée de rencontre autour du Lean Startup.
EY presented at the 22 World Petroleum Congress, focusing on the impact of the lower oil price on LNG megaprojects, the opportunities and challenges to adopt new practices to make megaprojects more cost effective.
Synthese des propositions et actions du medefAdm Medef
SYNTHESE
Le MEDEF présente ses propositions et ses actions pour la digitalisation de l’économie française
Le MEDEF a défini une stratégie en faveur de la transformation numérique de l’économie française autour de 5 axes, déclinés en propositions de réformes et en actions :
- Axe 1 / Filière technologique : faire de la France la « Silicon Valley » de l’Europe autour des technologies et des plateformes de la filière IoT (Internet of Things, c’est-à-dire l’Internet des objets) ;
- Axe 2 / Ecosystème industriel : créer un écosystème attractif et compétitif en France autour du prototypage, de la préindustrialisation et de la fabrication de solutions IoT ;
- Axe 3 / Entreprises : Accompagner 100.000 TPE PME et ETI françaises dans leur transformation vers la « Smart economy » : le Programme METAMORPHOSE (sensibilisation, formation, accompagnement et financement)
- Axe 4 / Attractivité : rendre la France « business friendly » pour attirer les investisseurs et favoriser la croissance de nos start-up et PME en ETI et en grandes entreprises ;
- Axe 5 / Communication : mettre en place une stratégie de communication internationale autour de notre vision et de notre stratégie « smart economy ».
Onopia - 55 Questions pour imaginer ou faire évoluer votre Business Model. Ces 55 questions sont à utiliser conjointement avec le Business Model Canvas d'Alex Osterwalder.
Gérer ses relations avec les journalistes/influenceurs peut parfois être une bien rude épreuve. Pour la faciliter et parce que Maddyness a à coeur d'accompagner les entrepreneurs et de les aider à tous points de vue, voici quelques conseils pour mieux séduire et entretenir de bonnes relations avec les journalistes/influenceurs.
Bpifrance le Lab - PME - 65e enquête de conjoncture - Juillet 2017Bpifrance
Depuis 32 ans, Bpifrance réalise une enquête semestrielle de conjoncture à partir d'un échantillon de plusieurs milliers de PME installées en France. Les principaux paramètres économiques et financiers – activité, emploi, situation financière, investissement et financement – sont analysés avec une distinction PME innovantes et/ou internationalisées. Découvrez aujourd’hui les résultats de la 65 e enquête de conjoncture PME.
France 2020. rapport d'étude avec synthèse. 2016 05 31Adm Medef
« Viavoice a réalisé pour le MEDEF un sondage sur « l’économie et les entreprises de demain ».
Ce sondage, réalisé auprès d’un échantillon représentatif de 1017 personnes, montre notamment le rôle crucial que l’entreprise doit jouer dans la réponse aux défis qui nous attendent selon les Français. »
Bereits heute kauft jeder sechste Deutsche Lebensmittel im Internet – vor allem Städter und Gutverdiener, wie eine aktuelle EY-Studie ergibt. Der Start neuer Lieferdienste in Deutschland könnte den Lebensmittelhandel noch einmal kräftig aufmischen. Lesen Sie hier, was für die Zukunft des Shoppings zu erwarten ist.
Fast jeder Vierte ist zu unethischem Verhalten im Job bereitEY
Fast ein Viertel (23 Prozent) der deutschen Manager sagt von sich, dass sie für das eigene berufliche Fortkommen und eine höhere Bezahlung unethisch handeln würden. Erfahren Sie hier außerdem in welchem Alter die Bereitschaft zu unlauterem Geschäftsgebaren am größten ist. http://www.ey.com/de/de/newsroom/news-releases/pressemitteilungen
Die Befragten kritisieren das Vergaberecht für Bauprojekte als formalistisch. Lesen Sie hier, welche Entscheidungskriterien im Fokus stehen und welche Bedeutung der Digitalisierung zugemessen wird.
Livre Blanc ALTARES: La Data, nouveau disrupteur du business model des entrep...Altares D&B
Découvrez à travers ce Livre Blanc comment la Data est devenue un des socles sur lequel se construit l'économie digitale contemporaine au point d'infléchir le business model des entreprises.
40 propositions pour moderniser et simplifier le droit de l'environnementAdm Medef
Le droit de l’environnement a considérablement évolué, que ce soit sous l’influence du droit communautaire, des "Grenelle de l’Environnement" ou des conférences annuelles environnementales. En perpétuel construction et marqué par une juxtaposition de textes, le droit de l’environnement est de plus en plus difficile d’accès.
Pour moderniser et simplifier le droit de l’environnement, le MEDEF formule 40 propositions réunies dans un Livre Blanc réalisé par le Comité Droit de l’Environnement du MEDEF ce Livre Blanc a été écrit dans l'intérêt partagé de la protection de l'environnement et de la compétitivité des entreprises.
Bpifrance Le Lab Les principaux resultats de l'enquete digital Bpifrance
Ce document est un complément à l’étude : Histoire d’incompréhension, Les dirigeants de PME et ETI face au digital (octobre 2017) https://www.bpifrance-lelab.fr/Analyses-Reflexions/Les-Travaux-du-Lab/Dirigeants-de-PME-et-ETI-face-au-digital
Nous y présentons une très grande partie des résultats issus de notre enquête, qu’il nous était difficile de tous faire apparaître dans l’étude.
Ces résultats de l’enquête s’organisent autour de cinq grandes parties :
• le détail de la méthodologie et de notre échantillon ;
• les résultats à plat avec trois focales : stratégie et projet de transformation digitale ;
• l’offre et la relation client ;
• la mise en œuvre technologique et l’exploitation des données ;
• les différences sectorielles parmi les six secteurs interrogés : BTP, Commerce, Industrie, Services, Tourisme et Transports ;
• le détail des trois profils de dirigeants que nous avons créés à partir des résultats de l’enquête : les Sceptiques, les Apprentis et les Conquérants ;
• les bonnes pratiques pour passer d’un profil à l’autre à partir d’une exploitation fine des données.
Managing balance sheet liquidity & long term funding Dr Rajeev Jain
Managing balance sheet liquidity and long term funding
• Do the company have the right cash management processes?
• The importance of accurately forecast company cash flow with liquidity management
• Looking at your balance sheet frequently: Do the company has sufficient funding sources?
• Ensuring the right balance of credit and non-credit service utilisation for funding process
• Learning about rebuilding the balance sheet and turning their problem into growth
• Establishing long term stability and security of our funding in turn helps protect our liquidity position in the crisis
• Building necessary tools and methods to achieve properly structured balance sheet
• Managing complex situations precisely through flexible values (general direction), values with longer lifespan than goals or objectives and past and present corporate actions
Webinar Deck: Efficient Methods for Managing Global Cash in Today's Regulator...Kyriba Corporation
Check out our powerpoint for Efficient Methods for Managing Global Cash in Today's Regulatory Regime where the expert speakers explored proven liquidity and intercompany cash management strategies, as well as tax/treasury collaborative initiatives that can help optimize global cash in an ever-changing complex environment.
Driving efficiencies in the new month end close - vena solutionsVena Solutions
The month-end close has become more complex since the early 2000’s. Increasing regulatory scrutiny is forcing companies to change the way they measure their success while continuing to generate full-scale, compliant, and timely financial statements every month. This paper examines four ways companies can remedy a dysfunctional month-end close without altering their core business systems or processes.
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Solving Financial Constraints with Innovative Funding SolutionGilbert Tam 譚耀宗
After the credit crunch in 2008, SMEs though they are amounted to the 80-90% of business activites but their access to funding has been greatly impacted by the traditional lenders, banks, that after the 2008 credit cruch are reluctant to maintain such business if no "bricks and mortar" are provided by sellers.
Liquidity for advanced manufacturing and automotive sectors in the face of Co...EY
With a global economy in crisis due to Covid-19 our liquidity and cash management deck for advanced manufacturing and
mobility companies looks at how these companies should best respond.
Current Write-off Rates and Q-factors in Roll-rate MethodGraceCooper18
Under the current CECL standard introduced by Accounting Standards Updates (ASU) 2016-13, there are several measurement approaches that financial institutions can use to estimate expected credit losses. Among these, the Roll-rate method, which uses historical trends in credit write-offs and delinquency, is the most popular. Historical roll rates are used to predict ultimate losses.
Similar to Intraday liquidity risk – are you prepared? (20)
The theme for this quarter is momentum meets uncertainty. The upward trend in crude oil, natural gas, LNG and refined product prices that began in Q1 continued into Q2. Crude oil markets began the quarter just below $100/bbl and have closed below that level on only two days since late April. As we begin Q3, there are increasing concerns about the health of the global economy and how that might affect oil and gas demand.
Quarterly analyst themes of oil and gas earnings, Q1 2022EY
Financial questions continued to attract the most attention of the analyst community, with major focus on how companies will respond to the war in Ukraine, elevated commodity prices and improved cash flows. Strategic questions focused on how the changing geopolitical environment will affect capital allocation in the short and long term. Operationally, all eyes were on the capacity of companies to step up asset utilization and bring new projects to market quickly. Explore the latest EY quarterly analysts themes.
EY Price Point: global oil and gas market outlook, Q2 | April 2022EY
The theme for this quarter is rearrangement. The loss, or potential loss, of Russian oil and gas supplies is forcing producers, refiners and traders to rethink the flow of crude oil and refined products from the wellhead to the gas pump in light of sanctions, potential sanctions and the risk of reputational damage. Countries, companies and consumers will all be searching for ways to adapt, and the outcome of the race to bring alternatives to market could alter the global energy landscape for years to come.
It is likely crude oil and LNG prices will remain elevated for some time. The process of diverting Russian oil through countries unwilling to sanction it will take time and there is little indication OPEC members are willing (or able) to increase production to make up for the loss of Russian crude. Spare capacity sat at 3.7 mbpd at the end of 2021, just above where it was in January 2020. Currently, sanctioned Venezuelan and Iranian production (about 3 mbpd below their peak) could fill the gap, but political and commercial obstacles remain. At today’s prices, US shale production is attractive, but the fastest the industry has been able to grow is between 1mbpd and 2mbpd per year. The LNG infrastructure was already stretched before the war in Ukraine and there is little prosect of finding new supplies soon.
As the largest buyer of Russian energy, Europe will be the epicenter. There is a deeply embedded bias there in favor for renewable energy, and the current crisis is certain to result in an all-out effort to accelerate the build-out of wind and solar power. The capacity to add new green energy is limited though by the project pipeline and supply chains for solar panels and wind turbines, and it is likely that much of the shortfall will be made up with the new LNG infrastructure.
EY Price Point: global oil and gas market outlookEY
As the last quarter of the second pandemic year draws to a close, we continue to see heightened contrast
between the medical and economic points of view. While COVID-19 cases are close to their all-time highs, so
are equity prices, and a leading investment bank declared (on 2 December, 2021 after the Omicron outbreak in South Africa) that it was “optimistic about the possibility of a vibrant 2022.” When news of the variant hit in
late November, the markets were rocked by the prospect of yet another round of local mobility restrictions and
an interrupted return to normal international travel patterns, on top of the Biden Administration’s announced
release of 50 million barrels of crude from the US Strategic Petroleum Reserve. So far though, with OPEC
standing by its planned gradual return to normal production, oil prices have stabilized, albeit below where they
were in mid-November. Henry Hub prices, always at the mercy of the weather, responded predictably to a
warmer-than-normal early winter in the US, falling from US$6.60/MMBtu in early October to below
US$4.00/MMBtu by mid-December. In Europe and Asia, following a short reprieve at the start of the quarter,
piped natural gas prices have spiked again on concerns triggered by Russian troop buildups on the Ukraine
border and uncertainties surrounding the Nordstream 2 pipeline. Looking forward, OPEC and the U.S. Energy
Information Administration (EIA) in their last forecasts of the year both projected that 2022 oil demand would
be above what we saw in 2019. Although time will tell if those forecasts are realized and other events could
intervene, the response to new virus outbreaks is well-practiced and the trade-off between public health and
economic reality has tipped toward a cautiously optimistic view.
EY Price Point: global oil and gas market outlook, Q2 April 2021EY
The theme for this quarter is governed. Apparent market balance at prices that could be sustainable is the product of calculated choices by market leaders and the cooperation of those who follow them. Economics played their customary role as well, with capital scarcity in North America taking about 2 million barrels per day out of the market, about half of the remaining gap in demand. While inventories are close to their pre-COVID-19 levels, there is still uncertainty. The resolution of the pandemic is in sight, but timing is unclear. Vaccine distribution in the US is having an impact but Europe is struggling to contain a third wave of infections. The taps have opened on economic stimulus, but it remains to be seen if policymakers have done enough or if they have overshot the mark.
The shape of the crude oil forward curve has fundamentally changed since the end of the last quarter. In late December of last year, the Brent forward curve was gradually increasing while today, the curve is backwardated. This is a clear sign that the market sees a short-term dynamic that is disconnected from the medium-to-long-term fundamentals. The lasting impact of the COVID-19 pandemic remains to be seen. While many have opined that COVID-19 marks a turning point in energy transition, the IEA recently released a five-year forecast of oil demand that shows steady growth, albeit at rates that are below historical expectations.
Gas markets are a paradox. At the Henry Hub and at LNG destinations, demand grows, investment lags and prices will occasionally attract attention. Traders, so far though, are unconvinced and futures prices don’t indicate imminent scarcity at any link in the value chain.
EY Price Point: global oil and gas market outlookEY
We enter 2021 on a note of cautious optimism for global health, the world economy, and the oil and gas markets. The first weeks of December brought approval in the US and the UK of the first of several COVID-19 vaccines. The speed with which vaccine development occurred is unprecedented, but certainly welcome. In the weeks following the early November announcement of 90+% effectiveness by the manufacturer of the first approved vaccine, the price of WTI crude oil increased by US$10/bbl to US$48/bbl, the highest level since early March. Sustainability hasn’t returned yet, and whatever time it takes to get the world to normal, it will take even longer for normalization within the oil and gas markets. Inventories remain at historically high levels and, optimistically, it will take until April before inventory returns to levels observed in the preceding five years. That’s an estimate, and there has obviously been some difficulty properly calibrating the expectations of how balance will return and how long it will take. In late November, OPEC met to adjust its output plans because of the anemic rebound in demand. In mid-December, the IEA lowered its demand forecast for 2021 due mostly to continued sluggishness in aviation fuel demand.
A mild winter has interrupted a recovery in North American natural gas prices after a run-up motivated by curtailed capital expenditures, upstream activity and production. After an initial meltdown, with cargo cancellations and dramatic price reversal, LNG markets have made a remarkable comeback, and the spread between Asia and Henry Hub has reached a level we haven’t seen in almost three years. It may be the case that interruption in FIDs has brought us to the cusp of a balance that can support reliable returns.
EY Price Point: global oil and gas market outlook (Q4, October 2020)EY
Oil and gas prices have recovered steadily from their lows and are relatively stable, but that stability is supported by the combination of purposeful withholding of production by oil-producing countries and economic stress on upstream independents. Oil prices closed the quarter roughly where they started it, while refining spreads were down slightly. LNG spreads were substantially higher at the end of Q3 than they were at the beginning of the quarter but are still roughly half of what is generally thought of as sustainable.
Going forward, the market will be looking closely at how the economy and demand respond to new developments with respect to a potential COVID-19 vaccine and the US election.
EY Price Point: global oil and gas market outlookEY
As we close the second quarter of 2020, in most of Europe and Asia, the first (and hopefully last) wave of the COVID-19 crisis appears to be abating. In the parts of the US where the virus hit early, the profile has largely matched Europe’s, while in other parts, the urge to reopen businesses has trumped the desire to contain the virus and uncertainty looms. In the developing world, the crisis has just begun, but without the economic headroom and resources necessary to contain it. As the crisis unfolded, the effect on oil and gas demand has been predictable but difficult to gauge precisely and therefore difficult to manage.
Oil prices have crept up steadily as production has been curtailed through coordinated action (OPEC+) and because of economic reality (unconventional oil in North America). That trend has been subject to momentary spasms when bad news hit the market. It would be understandable if traders were nervous, and it seems that they are. Although nowhere near where it was at the peak of the crisis, option implied volatility is still at historically high levels. Gas markets, without the benefit of coordination on the supply side, continue to deal with the market implications of storage at or near capacity. Interfuel competition in power generation has always provided something of a floor, but those lows have been, and will continue to be, tested.
Zahl der Gewinnwarnungen steigt auf RekordniveauEY
Immer mehr deutsche börsennotierte Unternehmen müssen ihre eigenen Umsatz- oder Gewinnprognosen nach unten korrigieren. Im ersten Quartal stieg die Zahl der Prognosekorrekturen auf ein neues Rekordniveau: Insgesamt 77 Gewinn- oder Umsatzwarnungen wurden registriert.
Die Corona-Krise trifft auch die Versicherungsbranche mit voller Wucht. Die Versicherer rechnen mit weniger Neugeschäft. Jeder Fünfte mit Personalabbau und Prämienerhöhungen.
IBOR transition: Opportunities and challenges for the asset management industryEY
EY Wealth & Asset Management explores the practical implications and the way forward for the transition to the new risk-free rates. This presentation aims to help asset managers and asset owners explore IBOR transition strategies that are compliant and future-focused.
Fusionen und Übernahmen dürften nach der Krise zunehmenEY
Folgt auf die Corona-Krise ein M&A-Boom? Laut Capital Confidence Barometer von #EY hoffen 40 Prozent der deutschen Unternehmen auf sinkende Bewertungen von Übernahmekandidaten.
EY Price Point: global oil and gas market outlook, Q2, April 2020EY
The first quarter of this year has seen some extraordinary events. As if chronic oversupply, prices stuck below sustainable levels, the looming energy transition, and investor pressure to decarbonize weren’t enough, our industry now faces a dramatic, but hopefully temporary, downturn in demand as a result of the ongoing COVID-19 outbreak.
Our Global Chemical Industry Leader Frank Jenner explores the trends and drivers that will shape the chemical industry of tomorrow in our latest Chemical Market Outlook.
Die Geschäftslage im Mittelstand hat sich leicht verschlechtert, ist in den meisten Branchen aber weiter überwiegend gut - die Einstellungsbereitschaft sinkt.
3. Page 3
The flow of cash throughout the day causes intraday
liquidity risk, which needs to be managed
Intraday liquidity risk is the risk that the bank fails to manage its intraday liquidity effectively, which could leave it unable
to meet payment [and settlement] obligations at the time expected, thereby affecting its own liquidity position and
that of other parties
► Unencumbered collateral (firm long positions, collateral received to secure intraday facilities,
collateral received from FMU participants)
► Central bank reserves (cash & securities)
► Unused intraday facilities available to the firm
► Collateral (cash & securities) posted to clearing banks and FMU participants
► Collateral posted to secure intraday facilities available to the firm
► Draws on intraday facilities provided to customers, and payments
Available
Intraday Lines
Inflows/Outflows from cash payments and settlement systems
Inflows/Outflows from securities settlement and clearing systems
Available Liquidity including uncommitted intraday credit lines
Intraday Sources
Intraday Uses
EY intraday liqudity survey
4. Page 4
The business model causes the extent of various
dimensions of the intraday liquidity risk
Expected Capabilities
Organisation
► Clearly defined limits and management of explicit
and implicit intraday liquidity risks across the
organization
► Board oversight and defined roles and
responsibilities for functions
Expected Dimensions
Methodology
► Projected cash and collateral positions for all
sources/uses
► Develop specific stress testing scenarios for
intraday exposures
Systems
► Real time monitoring of intraday cash and
collateral requirements across the organization
► Capability to measure intraday needs on a
currency, legal entity, and business line basis
Management
Actions
► Tracking and escalating risk indicators and
alerts – Board oversight
► Collateral optimization including automated
collateral allocation (cheapest to deliver, CSA
eligibility)
The new wave of intraday liquidity management regulations require capabilities across a series of dimensions.
Most G-SIB’s are in the beginning or intermediate stages of capability maturities.
Jurisdiction
Line of
Business
Legal
Entity
Products
Time specific payments at
central banks, CCPs, and
FMUs can vary across
jurisdictions
Limitations in
liquidity
transferability
across legal
entities
Identify source
and use of
funding and
monitor funding
shortfall by key
products
EY intraday liqudity survey
5. Page 5
Key findings
► All reporting institutions feel in a comfortable position regarding the intraday liquidity monitoring
► There is room for improvement with respect to liquidity and data management in that field
► There is an obvious need for development and implementation of stress scenarios
► Regarding time stamps and managing of time specific obligation there is room for improvement
amongst a number of institutions
► The majority of institutions is not in a position to centrally determine time specific obligations
► Ensuing the above, various institutions are not in a position to forecast a potential funding short fall at
all times
EY intraday liqudity survey
The following short survey summarizes key findings from 6 financial institutions in Germany*) on questions about
organization, monitoring tools, stress testing and data/systems concerning intraday liquidity management.
*) we are in the process of increasing the number and also roll out the survey to EMEA. The list does
include however, institutions of various sizes and thus representative for the German market
6. Page 6
1. Management and organizational structure (1)
EY intraday liqudity survey
100%
Management of intraday liquidity in relation to
currency
Currency-by-currency
Cross-currency
20%
40%
40%
Organizational level of report
Corporate level
Individual legal entity
level
Both
100%
Are you able to manage and mobilize collateral as
necessary to obtain intraday funds?
Yes
No 100%
Are you capable of managing the timing of your
liquidity outflows in line with the intraday objectives?
Yes
No
7. Page 7
1. Management and organizational structure (2)
EY intraday liqudity survey
100%
Are you prepared to deal with unexpected technical
disruptions to your intraday liquidity flows?
Yes
No 100%
Are you prepared to deal with unexpected disruptions
caused by large unexpected cash flows to your intraday
liquidity flows?
Yes
No
50%50%
Do you hold a separate intra day liquidity buffer from
the HQLA/ILAAP liquidity buffers?
Yes
No
50%50%
When do you expect to be compliant with BCBS 248?
2017
2018
Later than 2018
8. Page 8
2. Monitoring tools
EY intraday liqudity survey
Are you in a position to report the following KPIs as required by monitoring tools for all reporting
banks?
80%
Daily maximum intraday liquidity usage
Yes
No 100%
Available intraday liquidity at the start of the
business day
Yes
No
100%
Total payments
Yes
No
80%
Time-specific obligations
Yes
No
20%
20%
9. Page 9
3. Stress and Scenario testing
EY intraday liqudity survey
Have you defined the following stress scenarios?
Own financial stress
Yes
No
25%
Counterparty stress
Yes
No
Customer bank's stress
Yes
No
25%
40%
Market-wide credit or liquidity stress
Yes
No
60%
75%75%
75%
25%
10. Page 10
Additional questions relating to stress and scenario
testing
For the following questions, the number of answers received did not allow for a representative pie chart
presentation
Are the intraday stress tests separated from the present ones for regulatory purposes (ILAAP)
Are your stress tests for ILAAP and Intraday Liquidity the same
Are your stress tests regarding own financial stress for ICAAP and Intraday Liquidity the same
To what extend do you stress unexpected large EOD cash outflows
To what extend do you stress non receipt of large EOD cash outflows
► From the institutions replied, the general guidance was, that the stress tests for used for ILAAP and intraday liquidity
are the same and not seperated
► Specifically, the stress test regarding own financial stress for ICAAP and Intraday Liquidity was, however, different
► A stress test on large unexpected cash flows, respectively non receipt of a large unexpected cash flow, is only
conducted at one participating institution. The remainder of institutions does not see a need to stress this scenario.
EY intraday liqudity survey
11. Page 11
4. Data & Systems (1)
EY intraday liqudity survey
100%
Do your systems used by treasury have the
capacity to measure expected inflows and
outflows at all times?
Yes
No
Does RC have the necessary data to monitor
intraday liquidity at all times?
Yes
No
40%
Do your systems have the capacity to provide
each cash flow with a time stamp?
Yes
No
60%
50%
Do your systems have the capacity to anticipate cash
flow timings?
Yes
No
100%
50%
12. Page 12
4. Data & Systems (2)
EY intraday liqudity survey
100%
What is your default assumption for cash flows, which
are not timed?
EOD
Arrival time 60%
Do your systems have the capacity to forecast the
range of potential funding shortfalls at all times?
Yes
No
Do your systems have the capacity to monitor
the maximum, minimum and average net cash
flow for a give period?
Yes
No
50%
Do your systems have the capacity to monitor
unexpected intraday cash flows against expected
cash flows intraday in a timely manner?
Yes
No
20%
50%
80%
40%
13. Page 13
4. Data & Systems (3)
EY intraday liqudity survey
60%
Do you have a centralized system in order to gain
oversight for time-specific obligations?
Yes
No
Are you in a position to demonstrate your
ability to manage all time specific
obligations?
Yes
No
75%
Are your systems able to report intraday
liquidity requirements per subsidiary and
currencies?
Yes
No
25%
100%
40%
60%
Do you possess a centralized data base compliant
with BCBS 239 to ensure data availability,
consistency and comprehensiveness?
Yes
No
40%
14. Page 14
5. Main challenges
Regulator expectation/missing specification of regulatory
requirements
Technical implementation due to heterogeneous IT environment
Ascertainment of historic data, optimization of data and further
processing in stress testing
Smooth running of system
have organized approach amongst market participants to time
stamp swift codes (MT 900, MT 910)
EY intraday liqudity survey
where do you see the main challenges regarding intraday liquidity?
15. Page 15
Conclusions and Summary
► Decentralized data availability, reference data, systems and stress testing are
currently the main challenges regarding intraday liquidity management at
institutions
► Development as well as the forced holding of costly liquidity buffers comes
with cost on capital
► Efficient management of this liquidity buffer presents the major area of cost
savings
► The current systems generally are not aligned between the various business
lines and legal entities
► Having to tackle the challenge, this poses a good opportunity for institutions to
make up for the necessary spending via implementing an efficient front to
back solution
► EY can assist in all methodological and data management matters as well as
in the front to back solution
EY intraday liqudity survey
16. Page 16
Cash
flow
patterns
Stress
Testing
Challenges EY Approach
► Availability of time stamp
► Determine cash flow patterns in
non-stress situations – availability
of data:
► Inflows/outflows
► Central Bank Credit lines
► Collateral
► Identification of time sensitive
cash flows
► Bench marking of IT solutions
► Analysis to obtain cash flow
patterns in normal times and in
extreme times
► Modeling of cash flows
► Completeness of liquidity in- and
out flow sources
► Optimization towards target state
► Stress scenarios
► Own stress
► Customer stress
► Counterparty stress
► Market-wide stress
► Model appropriate and specific
stress scenarios for institution
► (Back-) Testing of Stress Scenarios
► Modelling / Testing of stress
scenarios
► Benchmarking and adaption to
specific situation
► Development of early indicators
► Incorporate interconnectedness
between counterparties and
liquidity sourcing
► Incorporate concentration risk
► Optimization towards target state
Outlook – main areas for improvement
Front to Back Solution
► Dynamic presentation of Intraday
liquidity in dashboard
► Comparison of liquidity actual vs
history on currency,
correspondent banking level
► Including payment and securities
transaction
► Show deviation to thresholds and
targets
► Process stress test as per defined
model
► Simulation of various specific
scenarios and measurement
against different Benchmarks
► Include early indicators in test
scenario
► Reports and statistics, like
concentration risk, deviation of
target state
EY intraday liqudity survey
17. Page 17
Manage
-ment of
intraday
liquidity
Cost
savings
Challenges EY Approach
► At all times abreast of liquidity
situation
► At all times able to act
► T+0, T+1, T+2 look through of
aggregated cash flows for friction-
less management
► Implement necessary
interfaces/IT solution
► Various Payment and settlement
systems for different
products/markets
► Install relevant IT/-business
processes
► Define thresholds for action
► Define process and reporting lines
for action
► Incorporates all
interconnectedness with regards
to business partners as well as
concentration of business partners
► Embed intraday liquidity
management into wider scope of
ILAAP
► Trade off between credit lines and
liquidity buffer
► Optimal composition and
management of intraday liquidity
buffer
► Aggregation of cash flows in
various front- and back office
systems in order to guarantee
frictionless intraday liquidity
management
► EY tool for liquidity buffer
optimization
► Benchmarking of credit lines and
liquidity buffer trade off
► Incorporate specific institutional
situation
Outlook – main areas for improvement
Front to Back System
► Automatic notification, alerts,
warning for violation of thresholds
► Dashboard shows critical state of
liquidity by currency, counterparty
and settlement systems, including
drill down function
► Monitor development of specific
Nostro / Vostro accounts
► Hold and release function of
transaction for active management
of intraday liquidity.
► Appropriate liquidity transaction
management to minimize liquidity
buffer
► Transparent view on cash
balances allows active collateral-,
cash- and credit line management
► Include all business area, with
intraday liquidity impact
EY intraday liqudity survey
18. Page 18
Your contacts
Dr. Heike Dengler
Manager
EMEIA Financial Services
Mobile: +49 (160) 939 21493
E-mail: heike.dengler@de.ey.com
Steffen Laufenberg, CFA
Executive Director
EMEIA Financial Services
Mobile: +49 (160) 939 14761
E-mail: Steffen.Laufenberg@de.ey.com
EY intraday liqudity survey