The Basel Committee has introduced two liquidity ratios i.e. LCR & NSFR under BASEL III reforms to ensure that financial institutions have sufficient liquidity to meet their short-term and long-term obligations under stress scenarios. Surya Software’s BASEL III LR Module along with its superfast data engine enables Financial Institutions with accurate day-to-day reporting and maintaining regulatory compliance.
Data plays an important part while calculating these ratios, performing scenarios, and generating reports. Surya Software’s BASEL III LR Module along with its superfast data engine enables Financial Institutions with accurate day-to-day reporting and maintaining regulatory compliance.
Surya’s BASEL III LR solution helps banks to collect specific data and calculate these ratios for different regulatory requirements.
BASEL LCR Stress Scenarios:
- The run-off of a proportion of retail deposits (not applicable for non-deposit taking
- A partial loss of unsecured wholesale funding capacity.
- A partial loss of secured, short-term financing with certain collateral and
- Additional contractual outflows that would arise from a downgrade of Bank/FI in the public credit rating by up to three notches, including collateral posting requirements
- Increase in market volatilities that impact the quality of collateral or potential future exposure of derivative positions and thus require larger collateral haircuts or
additional collateral, or lead to other liquidity needs
- Unscheduled draws on committed but unused credit and liquidity facilities that the Bank/FI has provided to its clients. The potential need for the Bank/FI to buy back debt or honour non-contractual obligations in the interest of mitigating reputational risk