LM-2.4 LM-2.4 Management Information Systems
LM-2.4.1
A bank must have reliable management information systems ('MIS') that provide the Board,
senior management and other appropriate personnel with timely and forward-looking information on its liquidity positions. The MIS must be appropriate for the purpose of supporting the bank's day-to-day liquidity risk management and continuous monitoring of compliance with established policies, procedures and limits. The MIS reports must be capable of supporting the Board andsenior management in identifying emerging concerns on liquidity, as well as in managing liquidity stress events.August 2018LM-2.4.2
A bank's MIS must encompass information in respect of the bank's liquidity cushion, major sources of funding and all significant sources of liquidity risk, including contingent risks and the related triggers and those arising from new activities. Moreover, a bank's MIS must have the ability to calculate risk measures to monitor liquidity positions:
(a) In all currencies, both individually and on an aggregate basis;(b) Under normal business conditions and during stress events, with the ability to deliver more granular and time-sensitive information for the latter;(c) For different time horizons (e.g. on an intraday basis, on a day-today basis for shorter time horizons (of, say, 5 to 7 days ahead), and over a series of more distant time periods thereafter); and(d) At appropriate intervals (in times of stress, the MIS reports must be capable of being produced at more frequent intervals such as daily, or even intraday if necessary).August 2018LM-2.4.3
To facilitate liquidity risk monitoring, there must be reporting criteria specifying the scope, manner and frequency of reporting liquidity information for various recipients (e.g. daily/weekly & monthly for those responsible for managing liquidity risk, and at each meeting convened by the Board or its relevant delegated committee(s) during normal times, with increased reporting frequency in times of stress) and the parties responsible for preparing the reports.
August 2018LM-2.4.4
In particular, the reporting must compare current liquidity exposures to established limits (both for internal liquidity risk management and statutory compliance purposes) to identify any limit breaches. Breaches in liquidity risk limits must be reported to the appropriate level of management. Thresholds and reporting guidelines must be specified for escalation of the reporting of breaches to higher levels of management and the Board.
August 2018
