HSBC has selected Financial Studio from FinArch to deliver systems support for Liquidity Risk Calculation and Reporting.
The solution provides HSBC with a common data architecture in which to store, manage and enrich data from all parts of the business, according to a release.
Data is enriched through a sequence of calculators, addressing valuations and cash flows, Liquidity Risk, Gap Analysis, Concentration Risk and Ratio Monitoring.
FinArch's Simulation Engine caters for the stresses prescribed by the UK FSA as HSBC can stress their Liquidity Risk measures across multiple scenarios, such as Rollover, Balance Sheet Growth, Default, Prepayment, Devolvement, Maturity, Haircuts and Interest Rates.
HSBC has also put in place a pan-European Liquidity Risk measurement reporting solution using Financial Studio.
"The solution meets our needs now and is extendible to other domains of liquidity risk management and reporting in other jurisdictions, not only the UK," says Mike Doherty, head of asset and liability management, HSBC EU.
Financial Studio's Risk Return Framework covers the measurement and management of all risk types.
In addition to liquidity risk, it covers credit risk, market risk and operational risk. The simulation engine and analysis engine work in parallel with all risk types, not just liquidity. In addition the framework provides comprehensive functionality for risk adjusted performance measurement and economical capital, including aggregation and allocation.