The European Central Bank (ECB) recently conducted a thematic review to analyze existing intraday liquidity risk management practices among a sample of the most complex global systemically important banks (G-SIBs).
“The ECB’s latest guidance underscores that intraday liquidity risk is not just a side issue but the foundation of financial stability and investor confidence. By providing clear direction on forecasting, monitoring, and managing liquidity, the ECB has delivered a valuable framework to help banks enhance their practices and prepare for future challenges,” said Alex Knight, head of EMEA at Baton Systems, in emailed commentary.
“To meet these standards, banks must urgently transition from outdated legacy systems to modern, robust intraday liquidity management tools. Real-time, high-quality data enables treasury managers to precisely monitor and predict liquidity needs and intelligently sequence payments, minimizing risks of shortfalls. In turn, this improves the resilience of individual banks and strengthens the stability of the European financial system, especially during periods of stress.”