Treasuries today have evolved with more responsibilities to maintain adequate liquidity under severe stress conditions, hedge with better precision and optimize funding at all times. However, they are confronted by siloed and disconnected systems today that prevent them from having a real-time global view of liquidity that limits their ability to execute effectively in financial stress situations.

A bank's funding desk is responsible for managing liquidity risk, interest rate risk and FX risk associated with various currencies on the bank's balance sheet. It needs to make optimized investment decisions by leveraging aggregated cash flows and off the balance sheet items. It also has the responsibility to enhance profit margins of treasury portfolios through interest rate positioning and collateral management. Funding and investment needs of customers are met through money market transactions in various currencies across the globe.

The Funding Desk system provides day-to-day liquidity management for the Money Market desk to ensure adequate liquidity at all times, to set and comply with liquidity risk limits, to monitor the gap profile structure and funding, to monitor short-term liquidity outflows and their coverage by liquid assets, and daily gap analysis to secure short term liquidity for such products as: Repo, FX swap, Collateral, Lines of Credit and Money Market Products.

Funding Desk

The solution is built on a robust technology infrastructure and is capable of handling liquidity portfolio analysis and aggregation on the fly to enhance trading, funding and hedging decisions.

Salient features of the Funding Desk Module are:

  1. Money Market Trading: MM Trading module offers the ability to interface across front, middle and back office and provides support to incorporate multiple products. It is powered by an Algorithmic Global Cash Pooling (GCP) framework which offers real-time global visibility of cash positions.
  2. Curve management: This module offers robust facilities for Curve Management, from setting up standard curves to “Multi-Revals” for revaluations using different yield curves.
  3. Auto-Squaring: This module enables traders to pre-define rules and automatically execute offsetting trades and close-out positions.
  4. Historical Cash Flow Analysis: Historic cash-flow volatility analysis together with future cash-flow modelling tools can be valuable enablers in this process as well as serve as early-warning tools for forecasting cash surpluses and deficits.
  5. Real-time Risk Monitors: Intraday Liquidity Monitoring is enabled through transaction by transaction near-real time risk monitors. Variances in value or price fluctuations of assets can be captured via various metrics and methodologies including MTM, DV01, Accruals & Economic Value.