Skip to content

FRM Part II · FRM Exam Part II · Intraday Liquidity Risk Management

Under the Basel intraday liquidity monitoring tools, why is the 'intraday throughput' tool, showing the proportion of outgoing payments settled by specific times of day, useful to supervisors?

Intraday throughput shows what share of outgoing payments settle by particular times of day. Supervisors use it to see whether a bank is delaying payments to conserve liquidity, which can transmit liquidity strain to counterparties and signals stress in the payment system.

  1. AIt indicates how quickly a bank settles payments, revealing whether it is delaying payments to conserve liquidity, which can pass pressure to counterpartiesCorrect
  2. BIt measures the bank's capital adequacy ratio at the close of each day
  3. CIt replaces the need to monitor the largest counterparty net debit positions
  4. DIt calculates the bank's overnight funding cost

Explanation

Throughput shows the cumulative share of outgoing payments settled by set times. Late settlement can signal a bank is conserving liquidity by delaying payments, creating knock-on effects on counterparties. It is not a capital or funding cost measure and does not replace other tools.

Did you get it right without looking?

One question tells you little. A timed set on Intraday Liquidity Risk Management shows your real accuracy, how long you take and where you lose marks.

Practise Intraday Liquidity Risk ManagementFree diagnostic mock

More Intraday Liquidity Risk Management questions