Article: The Absence of Cash is the Silent Assassin!06 November 2017 | Andrew Whiteley
In the crisis of 2008, known issues of timing and risk within settlement processes caused extreme stress across the industry and led to the failure of major institutions.
Many encountered serious issues managing the liquidity and collateral to meet their settlement obligations. Experienced liquidity professionals were already acutely aware of the complexity and risk of daily management of provisioning intraday liquidity – cash. And in 2008, their concerns were proved when institutions that could no longer meet their obligations failed due to the absence of cash, in the right place at the right time. The Silent Assassin had struck!
Although 2008 highlighted the criticality of intra-day liquidity, regulators and the industry have been slow to reduce the likelihood of a sequel. Initiatives across payments, settlement and liquidity have required increasingly granular and frequent reporting but without significant change to cash