Ahead of the Capital Management Forum, the Center for Financial Professionals interviewed VP, Treasury Strategy of Deutsche Bank, Sam Steer on his panel discussion where he will be sharing his thoughts on understanding the relationship between liquidity and capital and impact of liquidity standards.
Sam, can you tell the Center for Financial Professionals’ readers a little bit about yourself and your professional experience?
I work in Treasury Strategy at DB, with responsibility for the liquidity and funding plan, and work on several projects across financial resource management. I’ve held several roles in Treasury Strategy, Transfer Pricing, Liquidity Management and Technology, and hold an MA in Computer Science and a Grad Diploma in Economics.
In your opinion with out giving too much away, what are some of the key benefits from reviewing the relationships between capital and liquidity?
Capital and Liquidity are connected through balance sheet requirement of HQLA, and bail-in requirements for liabilities. Further, constraints on the liability profile of the bank and or on the liquidity of assets can impact revenues and costs, and thus capital development.
With the regulatory standards in mind, do you believe banks should have a reactive decision-making approach to handling this or should they plan strategically?
Banks should plan strategically, forecast and manage the balance sheet pro-actively, whilst maintaining the mandate to react where necessary.
How important are the liquidity regulatory standards LCR and NSFR to consider and what impacts must financial institutes be wary of?
Extremely important – these are key constraints in Balance Sheet optimization.
How do you see the role of the Liquidity Risk professional changing over the next 6-12 months?
Both increasing specialisation in certain areas, as the discipline continues to mature, and increasing generalisation in other areas as banks move towards a more integrated financial resource management model.
