Liquidities at Risk
FIS’ Liquidity at Risk (LaR) solution is the first product to hit the market that fulfills the demands on the calculation and control of liquidity risk in short-term liquidity management.
LaR covers the bank-supervisory demands on risk management and controlling. This forms the basis for an efficient controlling of short-term liquidity risk. And what is more, banks can use this new solution to profitably redeploy their often excessive liquidity reserves. LaR is ideal for use in domestic and foreign universal and direct banks.
LaR estimates the expected net cash outflows from all of a bank’s autonomous payment movements during a business day, that with a given probability won’t be exceeded. The risk is calculated using the POT method, which has been in use in the natural sciences and the insurance industry for many years.
In a nutshell, the LaR solution supports a bank at three levels: it fulfills one of the key regulatory requirements; it is the first product for controlling the liquidity risks arising from the payment flows of a bank; and it can raise interest earnings via a statistically proven redeployment of liquidity reserves.