20 Jan 2010
In 2010 and beyond, Rule's Liquidity Management Practice
anticipates that changes in the liquidity management space in the
UK will be largely driven by the need to minimise the cost of
liquidity, to safeguard the banks and to create competitive
advantage.
A Financial Services Authority spokesman
recently predicted that "banks are likely to have to raise an extra
£110 bn of liquid assets at an annual cost of £2.2bn" in response
to policy statement 09/16. Once the size and cost of these
liquidity buffers becomes apparent, as they are allocated by the
FSA, the banks will be forced to take active steps to minimise the
buffers' size and pass on the cost to their
customers.
Swiftly then, the focus will move away from
actual regulatory reporting to concentrating on minimising the cost
of that compliance. In addition, leading banks will seek real
competitive advantage by implementing proactive liquidity
management capabilities to administer their liquidity more
effectively.
Although particular challenges remain in the
areas of real time, intra-day liquidity management, liquidity
pricing and creating a liquidity-centric view across a bank's
securities businesses, tremendous opportunities also exist for
banks to benefit from significant operational efficiencies in the
management of liquidity, to gain valuable insights into customer
behaviour and to develop new customer services. Rule Financial's
unrivalled combination of business experts and innovators in
Liquidity Management, Risk Management, Securities Finance and
Collateral Management, coupled with our experience of delivering
change in complex banking environments, positions us ideally to
service our customers.
