Tips of the trade

The Panel
Damian Harland, Manager, Liquidity policy, UK Financial Services Authority
Simon Hills, Executive director, Prudential capital and risk, British Bankers’ Association
Neil McGovern, Director of financial services marketing, Sybase

Recent regulations introduced by Basel, the UK Financial Services Authority (FSA) and US regulators have all focused on the importance for banks to establish a robust liquidity risk management framework. Firms are now required to set liquidity risk tolerance levels, maintain adequate levels of liquidity through a cushion of liquid assets, identify and measure a range of liquidity risks, as well as stress-testing scenarios and the framework itself. The challenges facing firms to comply with the new regime, which remains uncertain due to the delays by the Basel Committee, are many. Complying with the new regulations will be tough enough, but finding some business benefit from the process will be very difficult.