The world’s largest financial institutions are pressing regulators to be more consistent and transparent about their approach to liquidity as part of a broader private-sector effort to make sure banks remain solvent in a crisis.
In a report published Monday, the Institute for International Finance, an association of the world’s largest banks, sets out recommendations designed to improve the way liquidity risk is managed inside large institutions.
The report, the product of a year-long project involving executives from more than 30 banks including Barclays, Citigroup, HSBC and Merrill Lynch, is an acknowledgment of the growing complexity of banks’ balance sheets as they expand into an array of new financial instruments. It also recognises that they are increasingly dependent on each other for long-term stability.
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