A Letter From – New York

Insights

27 Sept

By Phillip Straley (FNA President & CRO) & By Jeremie Feuillette (Managing Director, Global Head of Liquidity Optimisation Solutions)

We had a great visit to New York this past week, spending time with existing and prospective bank Treasury / Liquidity Optimization clients and some of our professional services firm partners. From a seasonal perspective, we were fortunate to hit New York just as summer was breaking, so we had beautiful weather all week as we shuttled between downtown and midtown offices.

Key takeaways from our bank Treasury meetings:

USD liquidity buffers – It’s clear that for most players, size of buffers continues to be a pain point, particularly as USD clearing businesses continue to grow, and most particularly for large FBOs. Buffer optimization is a key focus, and the driver of much of FNA’s work.
Overhang of Spring 2023 (SVB etc) – There remains a high degree of focus from regulators and management teams on risk, control and payments/flow visibility capabilities for times of stress, for banks of all sizes, from GSIBs to mid-size regionals.
Fed reviews – Federal Reserve thematic reviews around liquidity management have recently completed for many of the larger banks, some of which came away with a relatively clean bill of health, while others continue to get marked down for lapses around data lineage, insufficient payment controls, and weaknesses in intraday visibility.
Core payments infrastructure – many large and mid-sized players are currently overhauling core payments technology, often replacing or re-tooling systems that have been in place 20+ years, with focus on supporting of cloud infrastructure, new payments messaging standards (ISO20022) and new payments requirements (e.g., faster payments, compressed settlement times).
Payments venues – high degree of interest in tradeoffs around payment venues, both for established venues (e.g., CHIPS vs. FedWire) and new market infrastructures, with focus on liquidity utilization in the venue and required for pre-funding and supplemental funding. This is also driving a lot of interest in FNA’s optimization capabilities.So – plenty of opportunities, for us and our clients!

It being New York, we also managed a number of great meals, from a hole-in-the-wall taco joint to a casual Izakaya, to the newer little sister restaurant, Il Buco Alimentari, to an old favourite Italian. If you’re into reds, we recommend the Sagrantino di Montefalco!