Key activities
An ILAAP assesses whether a bank holds adequate liquidity and has robust funding arrangements in place to support its business strategy under both normal and stressed conditions. It should be updated annually or whenever there are significant changes in the firm’s risk profile, business model, or external environment. The ILAAP must be documented in a format that is accessible to the regulator and consistent with internal governance expectations. This should be updated at least annually or in the event that significant changes to the bank’s business, risk profile or operating environment.
To ensure your ILAAP is aligned with regulatory guidance and best industry practices, we offer a structured and collaborative service model:
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An ILAAP captures relevant aspects of the banks liquidity and funding risk management, governance, liquidity policies, funding strategy, funding plan, and liquidity contingency plan. It identifies material liquidity and funding risks, assess mitigants, and defines severe but plausible stress scenarios tailored to the bank’s business model.
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Liquidity stress testing and cash flow forecasting over a range of time horizons, incorporating both idiosyncratic and market-wide shocks.
Assessment of survival periods and buffer levels under stress conditions.
Analysis of funding concentration risks, funding gaps, and access to contingency funding.
Review of the internal control framework governing liquidity risk management and the use of early warning indicators.
Review and analysis of your Pillar 2 liquidity requirement (e.g., intra-day liquidity), which is not already covered under Pillar 1.
Linkage with Recovery Plan options that support liquidity restoration in times of stress.
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Preparation of the ILAAP document, structured to clearly articulate your liquidity risk profile, stress testing results, governance, and risk appetite framework. We ensure consistency with your ICAAP and alignment with the Recovery Plan. We also prepare supporting documents, such as liquidity a roadmap for any remediation actions.
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The draft ILAAP is presented to the relevant maagement committee (e.g., Asset and Liability Committee and Board Risk Committee) for challenge and refinement. Final approval is obtained from the Board, with supporting packs tailored for executive discussion and regulatory submission.
What we offer
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End to end solution
We work collaboratively with your senior team and boards, tailoring our approach to your business to develop a bespoke project plan for your ILAAP and the production of a document and regulatory returns.
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Elective services
You may just require support for specific tasks, such as scenario and risk evaluation workshops, stress testing, and training on industry guidance and best practices. Whatever support you need we’d be glad to be an extension of your team.
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Review & assurance
You may undertake the ILAAP internally. In this event, we will be pleased to review the inputs and outputs of the process including the ILAAP document to provide assurance that you have followed regulatory guidance and industry best practice.
Ready for your ILAAP?
Why choose us
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Deep practical knowledge of the regulations and how to apply them proportionately for small and medium sized banks, ensuring you efficiently utilise capital and liquidity resources.
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We’ve undertaken a significant number of ICAAPs for our clients so keep abreast of the latest PRA guidelines and industry best practices.
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Effective project delivery with an efficient and high-quality engagement that saves you time and reduces the regulatory burden. This includes k-alm® our software as a service that includes robust, in-built stress testing models.
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What really defines our success is the strong, strategic partnerships we form with our clients. We listen carefully to their requirements to achieve positive results and make a lasting impact. Time and again clients comment on our responsiveness and the accessibility of our senior team.
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A professional and fit for purpose ILAAP document that has a a clear flow and structure. It assists with the management and mitigation of those risks and ensures adequate systems and controls are designed and implemented.
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Our clients are able to use the inputs and final ILAAP document on an ongoing basis as part of their wider risk-management practices.
What are we talking about
You might be interested in k-alm®
k-alm® is a software-as-a-service solution that we’ve specifically designed to help small and medium-sized banks conduct stress tests, evaluate funds transfer pricing, and manage liquidity and interest rate risks, without the cost or complexity that is often associated with enterprise solutions.