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IIF Comment Letter on BCBS’s Consultative Document on Monitoring Indicators for Intraday Liquidity Management
On Friday, September 14, the IIF submitted a comment letter in response to BCBS’s consultations on intraday liquidity management. The Basel Committee proposed a set of eight indicators that will enable supervisors to monitor how banks manage their intraday liquidity risks.
The IIF raised concerns that there is little indication of how the data gathered from the indicators will be interpreted and used, and how they will inform supervisory and regulatory decisions. A number of the issues raised are technical, and it will be beneficial for there to be face-to-face discussions between intraday specialists of both direct and indirect participants, and the official sector, in order to gain further understanding about the goals of the indicators and the nature of the issues raised.
The IIF encouraged the BCBS to further weigh the costs and benefits of the indicators, before they are put in place, in order to avoid unintended consequences. The IIF suggested that for many of the indicators, central banks and payment systems may be better placed to report the indicators, since they have the information and tools to monitor intraday liquidity risks.