Internal Liquidity Assessment Process (ILAAP) Reporting

SUMMARY

The engagement was a continuation of the liquidity risk management support Avantage Reply had completed previously for the client, a marketplace organiser for the trading of shares and other securities. Upon completion of an Internal Liquidity Assessment Process (ILAAP) Handbook, which outlined how the ILAAP report should be built across the Group, Avantage Reply was tasked with the development of the first, stand-alone ILAAP report of the institution.

CUSTOMER GOALS

The project required a seamless integration of the liquidity work done prior in order to deliver the following:

1. Design and develop a separate, stand-alone ILAAP report covering all relevant group entities, which would be consistent with the existing Internal Capital Adequacy Assessment (ICAAP) report;
2. Coordinate the design and development of the ILAAP report with various stakeholders (i.e. Treasury, Risk Management and Regulatory Reporting);
3. Facilitate the review and approval process of the ILAAP report

CHALLENGES

As before, the scope of the project was very broad in addition to a very tight timeline. The team had to develop a brand new ILAAP report from start to end, while ensuring that the relevant approval processes have been executed flawlessly, within only 8 weeks. The main challenges were internal resources being under strain and last minute changes that required additional internal realignment.

SOLUTION

Avantage Reply’s team led the project along with the coordination of the ILAAP development and drafting of the report. A senior advisor who provided the necessary technical and industry best market practices supported the project. The final delivery consisted of:

• A new ILAAP report;
• An updated ILAAP Reader’s Manual;
• An updated Liquidity Adequacy Statement;
• The Executive and Supervisory Board presentations, which described the key ILAAP elements to facilitate the approval process.