The company claims that its new solution will improve the bank’s ability to monitor internal liquidity – both structural and intraday -along with stress test to calculate the bank’s capital adequacy and rigorous reporting process to review the implications of the liquidity mismatch.
BASEL III is part of the effort made by the Basel Committee on banking supervision to enhance the banking regulatory framework.
At a high level, the regulations fall in two groups viz. Solvency and Liquidity. Globally, banks have progressed adequately on the ‘solvency’ part of regulation while working on Basel I, II and 2.5 regulations.
According to Polaris its solution helps the banks to achieve the following business rationale with regard to BASEL III norms:
Intraday Liquidity Management
- Minimize Intraday Liquidity Exposure
- Reduce the Cost of Borrowing
- Optimize Investment
Structural Liquidity Management
- Enables Asset -Liability classification/definition
- Ratios for Short term and long term funds usage
- Scenarios/Stress Testing and its impact on liquidity and determine the capital coverage
Pricing
- Helps in arriving at the right pricing to achieve borrowing and lending targets- core to Structural Liquidity Management
