Services : Liquidity Function Review

Accurately measuring and effectively managing liquidity is vital.  This was made evident in the recent financial crisis, which was as much due to an inability to sustain adequate liquidity as it was to asset quality.  A sweeping regulatory response, for example in US interagency liquidity guidance and the expanded Basel III mandates, is the new reality for Boards and managers.

The MPS Liquidity Function Verification Report examines and verifies every facet of your institution's liquidity model, its risk applications and supporting liquidity and contingency funding policies.  It is the industry's best solution for meeting the business and regulatory needs to maintain a strong liquidity measurement and management function.

With this MPS service, your institution is empowered to:

  • Create confidence in your liquidity model's analyses and risk testing.
  • Meet 2010 Interagency Policy Statement on Funding and Liquidity Risk Management mandates.
  • Define high precision cash flow inputs, including loan default influences, for your liquidity model.
  • Ensure adequate liquidity and contingency funding policy governance.


MPS Liquidity Function Verification Report

This report examines and verifies every facet of your institution’s liquidity model, its risk applications, and supporting liquidity and contingency funding policies.  The model's control environment, technical specifications and risk measurement methods are assessed, including stress testing.  A review of current liquidity and contingency funding policy governance is provided.

Quality assessments are presented in an Executive Summary with a ranking of the overall liquidity function based on its estimated liquidity model risk from an absolute standpoint, and relative to your peers.  Prioritized upgrade recommendations are provided.  Detailed discussion of the recommendations follow.  

    Liquidity Model Cash Flow Inputs Enhancement

    Accurate cash flow inputs are needed for effective liquidity measurement and risk control. MPS core deposit behavior, loan prepayment/paydown, and loan credit quality reports use our patented Advanced Assessment Methodology to analyze your institution’s historical experience. Forecasts from those analyses define high precision cash flow inputs, including loan default influences, for your liquidity model. This empowers you to measure your true liquidity position, ensuring compliance and performance.