Liquidity Risk Management Information Systems

As a result of the global financial crisis that manifested as both systemic and firm-specific liquidity shortfalls and the consequent heightened regulatory oversight, banks and financial institutions are keenly focused on the need to identify, measure, manage, monitor, assess, and mitigate their liquidity risk positions in a timely manner. An effective management information system (MIS) is an important prerequisite that enables these foundational capabilities for achieving sound liquidity risk management (LRM) practice. The liquidity risk MIS should enable timely and relevant information to the board of directors, senior management, and liquidity managers to address both operational liquidity management and regulatory requirements effectively. To achieve this, a robust MIS infrastructure should be automated, auditable, adaptive, and sustainable. The core components of the liquidity risk MIS infrastructure should include a centralized data foundation, advanced analytical and stress test engines, management information portal, and reporting platform, all supported by a well-defined data governance and quality control framework.