The paper of the Euro Banking Association’s working group on liquidity management is zooming in on the challenges that market players from both the demand- and supplyside are facing across Europe today: evolving technical, operational and regulatory market requirements in general, and in particular the organisation of migrating liquidity management practices into the digital era. Appropriate liquidity management practices and risk mitigation measures are essential to this transformation for banks and corporates alike.

Against this background, the paper places a particular focus on analysing the effect of Basel III on two key elements of corporate liquidity management: the investment of corporate cash and the future availability of notional cash pooling.

“The present paper is the result of a first analysis of trends and future developments in liquidity management, which our new working group launched into last autumn and completed this spring,” says Claus Richter, Head of Cash Management Solutions at Nordea and Chairman of the EBA’s Liquidity Management Working Group. “In addition to the great input provided by our members from 18 different banks operating across SEPA, we have had several touchpoints with corporate treasurers. They have validated and enriched many of our findings in joint panel discussions, which has proven extremely valuable for our paper. We now look forward to opening up our discussions to the EBA Association’s technical provider constituency, which should help us to better understand technology requirements in the daily management of the asset cash by corporates.”