Impact of the regulatory agenda on a bank’s funding management

Impact of the regulatory agenda on a bank’s funding management

By Bernhard Kretschmar, Senior Manager, zeb.

Bernhard, can you please tell the Risk Insights readers a little bit about yourself, your experiences and what your current professional focus is?

I am with zeb and working inthe banking industry for more than 10 years. I am a Senior Manager in the skill base Finance and Risk and I am supporting projects with focus on risk, treasury & alm and regulatory reporting. Since 2012 I have supported projects in the area of liquidity risk management implementing solutions as a project leader.

At the Liquidity Risk Management Forum in June, you will be presenting on ‘Impact of the Regulatory Agenda on Bank’s Funding Management’. Why is this a key talking point in the industry right now and what can risk professionals gain from this insight?

Liquidity risk is still at the top of the regulatory agenda and is today – in contrast to the last decade – of almost equal importance as the capital regulations for banks. As a result we observe increasing audit activities with a focus on liquidity topics by the banking supervision. New instruments like the additional monitoring metrics and upcoming topics e.g. NSFR, TLAC/MREL and intraday liquidity emphasizes the persistent regulatory significance of liquidity risk. Particularly with regard to the SREP surcharge, a professional and well integrated liquidity risk management is not only a question of regulatory compliance but increasingly it becomes an economic factor for banks.

In your opinion, what is the biggest impact the regulatory agenda has had on banks?

A decade ago, liquidity risk was not a managed risk in many banks. The focus was clearly on capital. Today the resilience of the banking sector has been strengthened significantly and the increased importance of liquidity risk management considerably contributed to that development.

Without giving too much away, what are the SREP requirements for funding management?

In the course of the SREP inherent funding risks are to be assessed. That includes the institution’s funding profile, the stability of the funding profile, market access and the risks resulting from the institution’s funding plan.

What does the future hold for liquidity risk professionals? How can they keep up with the increasing change?

The key challenge for all banks and their liquidity risk professionals is to fully integrate the regulatory and strategic liquidity risk perspective into the overall bank management. Strategic decisions must be challenged in terms of regulatory effects and implications of regulatory developments need to be early anticipated and considered in strategic decisions. Banks need to operate regulatory efficient and not only compliant.

 


Want to know more? 

The Center for Financial professionals will address several of these key areas and more at the upcoming 7th Annual Liquidity Risk Management Forum taking place on 12 June in London. The forum will provide an exclusive platform for the industries finest to discuss the current liquidity risk landscape including regulatory requirements, markets trends and more. The event will include vital insight from leading CROs, Heads, Managing Directors and regulating bodies such as the European Central Bank. To view the full speaker line up, agenda and more please visit www.cefpro.com/liquidity.

Additionally for more information on registration please call +44 (0) 207 164 6582 or email us at marketing@cefpro.com.