11 Step VI: Reporting and Management Information

Liquidity management and reporting are inseparable. Through the ‘6 Step Framework’ we have looked at various types of reports and most if not all the individual steps conclude their findings in some sort of a report. This should not come as a surprise; one of the key objectives of the liquidity management framework is to provide information on the risk status to enable the correct and timely decisions. Without the information and reports we would be taking a shot in the dark.

The sixth and final step is, however, not so much about writing reports but rather the point in time where we look over the various outputs of the other steps, sort and evaluate them and compile them into digestible reports for the different audience. There are a few high-level principles we should try to honour:

  • Tailor the information to the needs of the audience. Ask yourself:
    • What role does that specific audience play in the liquidity governance framework?
    • What information do they need to fulfil their duties?
    • What are the settings and frequency of the meetings (is a meeting only to discuss liquidity risk or is it only one topic out of ten)?

    Keeping this in mind will help to avoid information overload, which is the tendency of most risk professionals. The result is that the information packages for the Board or management could become the size of a phone book and lose their purpose. From time to time, it can be useful to give more background to the ...

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