PMPG endorses Swift messages for intraday liquidity reporting
The Swift message set for intraday liquidity reporting underpins a rulebook created by the Liquidity Implementation Task Force, an industry group of twenty five large clearing banks, custodian banks and global brokers, to support compliance with BCBS requirements.
The LITF Global Market Practice Guidelines addresses the compliance challenges set out in BCBS 248, which calls for banks to implement monitoring tools for intraday liquidity management by January 2017. The tools require banks to report retrospectively on their intraday liquidity flows. It is expected that more national regulators will request their banking communities to provide evidence that they manage their liquidity flows in real-time.
The LITF has developed, with the support of Swift, a rulebook that includes global market practice guidelines for Intraday Liquidity Reporting. The aim is to establish a common set of global best practices in the Nostro and Custodian space regarding the use of Swift intraday liquidity reporting messages, which will help alleviate the four most common issues:
- Too few transactions reported on a real-time basis, especially in the Nostro space
- Lack of timeliness of reporting
- Lack of granularity of information provided and more specifically the lack of “time stamped” information
- Lack of common definition and business practice of the current message types commonly used by the industry (FIN Cat9 messages).
“To support the BCBS 248 requirements, Swift’s reporting messages are the predominant source of data,” says Michael Knorr, head of payments & liquidity risk management at Wells Fargo and a PMPG member. “Having a very clear best practice on the use of intraday reporting messages is an essential tool that will enable banks to collect the necessary data in support of the regulatory requirements across different jurisdictions. The PMPG provides a truly global forum to drive better market practices. The PMPG’s endorsement of these guidelines should provide the right vehicle for the banking community to use as a common reference enhancing current intraday reporting services.”
“It is great to be a part of this industry wide effort to streamline intraday liquidity reporting,” says Catherine Banneux, senior market manager, banking, Swift. Since the publication of the BCBS monitoring tools, Swift has seen a 30% increase in its liquidity reporting messages. We expect the guidelines, along with the support of the PMPG, to help increase usage and close the remaining data gaps.”
Click here to find out more about this initiative, or to download a full copy of the LITF rulebook.