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Intraday liquidity & real-time treasury: The Covid-19 advice to follow and the advice to ignore

One of the consequences of lockdown and large numbers of professionals working from home has been an outpouring of guidance and advice on how financial institutions, particularly treasury & liquidity functions of banks, should react in this time of Covid-19. I thought it worthwhile sifting through this material and drawing out conclusions relevant to Intraday Liquidity & Cash Management. I’ve put some summaries and links to the more interesting material at the end of this article and offer some overview perspectives upfront. These perspectives are based both on what I’ve read and also the many conversations I've had with those busy dealing with liquidity matters in banks today.

Terminology note: there are many different phrases being used to define and describe the chaos that is being experienced globally; the effects on people, business and the economy (Covid-19, Coronavirus, the Pandemic, the Virus, the downturn etc). I have spotted and adopted the simple phrase 'All This'. It’s succinct and sums up the all-encompassing nature of what we are experiencing.

Six takeaways

1. Advice dates rapidly. I realised pretty quickly that there is no point in looking at material written before March 2020, as this would have been conceived in a time before ‘All This’. Just ignore the following type of article or report: items aimed at being a forward view; describing the bank of the future; identifying priorities for 2020 and beyond. They may have been very well researched and concisely written but they could not have anticipated ‘All This’ and have aged incredibly quickly.

2. Must-do is (probably) already being done. Much of the advice is very repetitive across the advisory community. Also, any Treasurer/Liquidity Manager is likely to be too busy right now in execution mode to be able to do much more anyway. Where possible I have identified in 'the advice worth reading' those useful nuggets amongst the morass and, in particular, those items that may still be relevant after the first few weeks of ‘All This’.

3. Liquidity is available. Liquidity is out there within banks; the challenge is for liquidity managers to find it quickly. It appears that, post 2008/9, banks are well stocked with liquidity and speedy actions from central banks have improved matters further. No-one appears to be predicting any bank failures just yet, although bank staff are having to work extremely hard to operate in the new world: ensuring liquidity is in the right place to close positions; predicting customer behaviour as the world changes; managing significant increases in interactions with corporates who need access to credit and/or loans.

4. Stress testing didn’t anticipate ‘All This’ but it is still useful. Perhaps inevitably, stress tests that seemed appropriate even up to a few weeks ago did not include COVID-19 impacts. However, because there has been such comprehensive stress testing over recent years, banks have set aside large liquidity buffers and generally have the disciplines to react well in this crisis. Banks should now be running daily stress modelling as the impact of ‘All This’ is evolving all the time and liquidity strategies must be refined continually.

5. Real-time insight and processes. There are two consistent items being raised that are worth drawing out. First, the need for real-time insight. Having up‑to‑date liquidity position information at your fingertips is vital to respond to regulator requests, senior management queries, to manage through the settlement day (and beyond) and prepare as much as possible for subsequent days. Second is the need for a rigorous process to steer through ‘All This’ on a daily basis. Firms with well-documented playbooks are able to cope with today’s stresses even if they weren’t necessarily the stresses anticipated when such arrangements were defined, rehearsed and refined.

6. War and Peace. I have had many conversations in the last few weeks with financial institutions who have been considering upgrading their systems and data to deliver real-time treasury capability (through Planixs’ solution, Realiti®). They all say that such a solution would be incredibly useful if live in the organisation today. The real-time insight on liquidity positions, settlement status, risk and also customer behaviour would be a wonder weapon in the war they are fighting in the trenches every day. However, while in the middle of ‘All This’, they don’t have the time to be thinking of the future and they need to fight the war now. When ‘All This’ stabilises, and we enter peaceful times, then they want to improve their liquidity and cash management capabilities ASAP. They would then be much better placed, with much improved weaponry, to fight the next set of liquidity battles. It could be that, unlike the last financial crisis, this war is actually a series of battles and shocks separated by more stable times. Banks should use these stable periods to improve systems and processes so they are better placed for the next time of stress.

The advice worth reading

There are many reports, articles and presentations explaining how financial institutions should operate during ‘All This’. To avoid repetition, it is probably best to simply focus on your professional advisor of choice and see what they are offering by way of guidance. I’ve listed out the most interesting items below along with some guidance notes.

Oliver Wyman has a very comprehensive set of materials that are being regularly updated. This covers many sectors, banking being just one. I’ve pulled out three relevant pieces:

There are a variety of short missives from consultancies which are quick and easy reads:

Accenture provides a call to arms in its Open Letter to bank CEOs ( There is some good stuff in here and it’s interesting to see that they are starting to lay the groundwork for what banks should do next, once out of crisis mode.

There are a couple of additional items worth calling out. Moorad Choudhry presents a focused item on how a bank’s Treasury and ALM function should be thinking of reacting to the crisis (

And finally, I looked back at an article that I wrote back in 2016 ( that I’d like to think still stands the test of time.

Conclusion – win this battle then prepare for the next one.

There are lot of viewpoints and pieces of advice out there, but by the time you would have absorbed it all the crisis would have passed. Treasurers, liquidity managers and cash managers should concentrate on managing the crisis for now but keep an eye on how to improve capability in the near future.

Banks, and in particular treasury and liquidity functions, are having to work hard to keep liquidity flowing and the economy functioning. Real-time insight into cash, collateral and liquidity is an extremely valuable weapon in this struggle. If you are having to rely on manual processes and herculean data manipulation to get this insight in as close to real-time as you can then it will soon be time to look at improving your systems. Once things calm down then please reach out and discuss how we at Planixs can help.

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