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We think Basel’s liquidity standards are rubbish

We have an FSClub Meeting on 16th March 2010 in London with the theme:

This house believes that the Basel Committee on Banking Supervision's
new liquidity risk monitoring standards are built on sand …
a
debate on the BCBS liquidity risk monitoring consultation due 16 April
2010.

Just before Christmas, the BCBS opened a consultation on radical new risk management measures for financial institutions. JP Morgan's research has shown the demands on banks to hold more capital could cost the industry $220 billion – of which $91 billion would be incurred by British banks.

New liquidity cover ratios, net stable funding ratios and market monitoring tools will certainly reshape today's business practices. However, we ask "will they be 'good enough'?" There is no common reference data set for much of what is required. This means that each firm is flying solo and the regulator left to wonder what good ratio systems and controls should look like.

Will one firm's calculations, based on market, counterparty, and instrument data, allow their ratios to be compared to another's? Judgements based on years of disparate legacy systems could have significant financial consequences if not appropriate:

  • Will the industry be forced into a massive infrastructure upgrade? 
  • Can new standards create new business opportunities?
  • How will the regulators benchmark the banks' implementations?
  • What standards are required to stand these pillars in solid ground?
  • Come and join the discussion, with an expert panel comprising of:

    • Christopher Clack, ScD, Director, Financial Computing, UCL
    • Bill Rickard, Head of Strategy and Policy, RBS Group Treasury
    • Julia Sutton, Director – Global Reference Data, Royal Bank of Canada Capital Markets
    • Alexander Dorfmann, Head of Product Management, Thomson Reuters 
  • The panel will be chaired by Capital Markets Chamber leader, PJ Di Giammarino. 
  • Click here to register.
  • About Chris M Skinner

    Chris M Skinner

    Chris Skinner is best known as an independent commentator on the financial markets through his blog, the Finanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here…

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