In order to assist the European financial services community in its attempts to improve liquidity risk management, the Committee of European Banking Supervisors (CEBS) has published a new consultation paper on how to go about producing an effective allocation mechanism for liquidity costs, benefits and risks, CP36. The recommendations are aimed at providing firms with a framework upon which to build internal pricing mechanisms to price liquidity risk and to align liquidity risk management culture across their organisation via suitable incentives, which are likely to include significant data gathering and technology requirements.
The UK Financial Services Authority (FSA) has this week been forced to back down somewhat in its aggressive approach to introducing further changes to its liquidity risk regime in light of the current economic climate. As promised last year, the regulator has assessed the state of the market and decided not to push ahead with the quantitative aspects of its regime, namely the controls around liquid asset buffers.
Judging by the number of references that have been made to living wills legislation during reference data related events and conferences recently, the market is already well aware of the data challenge awaiting it. However, for those that may have been asleep for the last few months, Thomas Huertas, director of the banking sector for the UK Financial Services Authority (FSA) and vice chairman of the Committee of European Banking Supervisors (CEBS), has been doing his level best to raise awareness of these challenges and how the industry can tackle them.
Following the relocation of its head office from Luxembourg to London last year (see 
As noted by A-Team Insight last month (see 
Next month, industry practitioners will have four opportunities to provide feedback to the Committee of European Banking Supervisors (CEBS) on its risk related proposals, including those around concentration risk and stress testing. The regulatory body has organised four separate hearings at its London premises to garner feedback on a number of its recent consultation papers, all of which involve technology and systems considerations.
A-Team Insight Exchange is a new event series for 2010, which will combine A-Team’s expertise in financial markets IT with thought leadership from world-class technology innovators and practical experience from financial market practitioners.
He may be on his way out the door, but UK Financial Services Authority (FSA) chief exec Hector Sants seems determined to deliver a few parting shots to ensure that financial services firms tackle their risk management failures. In order to boost its success in this endeavour, the regulator will be hiring another 460 staff members and will be looking for those with industry experience of dealing with internal risk management systems within the financial institutions it wants to police.
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