How Baton Supports ECB Sound Practices.pdf

Sound Practices for Managing

Intraday Liquidity Risk

Modular, institutional-grade controls for
forecasting, monitoring, and actively managing
intraday liquidity risk.

The European Central Bank has set clear expectations for the active
management of intraday liquidity risk.

Many banks have already assessed their intraday liquidity frameworks
and identified where specific capabilities need strengthening. The next
step is to deploy focused, supervisory-aligned controls that address the
identified gaps and integrate with existing treasury, risk, and payments
infrastructure.

While this document focuses on commonly identified gaps in forecasting,
monitoring and managing outflows, Baton supports multiple elements
across all seven ECB intraday liquidity risk management principles.

Baton provides a real-time intraday liquidity risk control layer, delivered
through modular capabilities that can be deployed independently and
easily extended over time as requirements evolve.

Modular by design

Deploy individual
capabilities where
gaps currently exist

Incrementally
extend functionality
and coverage as
requirements evolve

Operates as an
interoperable
control layer. Not
a replacement
platform

Real-Time Intraday Liquidity Control Layer

Traditional and Digital Payment and Settlement Rails
RTGS • Correspondent Banks • FMIs • CCPs • Digital rails

Intelligent payment release instructions

Updated information on balances, credits and debits

Baton Real-Time Intraday Liquidity Control Layer

Balance
Manager

Exposure
Manager

Liquidity
Manager

Dynamic
Forecasting

Alerts and
Workflows

Insight ¯ Decisioning ¯ Controlled Execution

Real-time data exchange
and status updates

Existing Treasury, Risk and Payments Systems
Positions • Exposures • Collateral • SSIs • Limits

Connects intraday liquidity insight directly to settlement execution.

ECB Principle 3 Forecasting intraday liquidity using priorities and timings

ECB Expectations

Institutions forecast intraday, end-of-day,
and next-day liquidity needs based on
upcoming payments, their priorities, and
associated intraday timing, with projections
updated throughout the day.

Baton’s intraday liquidity forecasting
enables institutions to project intraday
and next-day liquidity needs based on
forthcoming payments, their priorities
and associated intraday timing.

Forecasts incorporate known and expected payments
across currencies, legal entities and payment systems.
Mandatory time-specific obligations (TSOs) and other
priority payments are explicitly identified and embedded
into intraday, end-of-day and next-day projections,
including expected settlement timing.

Forecast accuracy is maintained through continuous
intraday recalibration using a rich reconciled data set
that reflects current liquidity behaviours, combining:

Projections are updated throughout the day to surface
unanticipated liquidity needs, the early identification of
very large known transactions and associated funding
requirements, and to support calculation of the largest
negative net cumulative position (LNNCP). Short-horizon
forecasts provide early visibility of emerging net outflows
and funding pressure points.

Forecast outputs can reflect expected ranges and
uncertainty under BAU conditions, supporting proactive
intraday liquidity management.

Explore Baton’s intraday liquidity forecasting capabilities

Key Baton Functions

.....

¯ Precision Forecasting

¯ Balance Manager

What this enables

¯ Exposure Manager

Continuously updated forecasts grounded in granular
real-time and historic reconciled data

Earlier visibility of emerging liquidity pressure points

Actionable outputs driving controlled and optimised outflows

Forecasting flow

Forthcoming payments and obligations

Payment rules and priorities (including TSOs)

Expected settlement for credits and debits

Intraday, end-of-day and next-day projections

Recalibration inputs

Live balances and
exposures

Settlement updates
and variance

Explore Baton’s intraday liquidity forecasting capabilities
!

ECB Principle 4 Real-time monitoring of intraday liquidity

ECB focus

Payment flows should be monitored in
material currencies in real time, with alerts
and tools to promptly identify unexpected
intraday liquidity needs and monitor the
adequacy of available liquidity.

Baton provides a, consolidated real-time
view of intraday liquidity across material
currencies, legal entities, counterparties
and payment systems.

Monitoring views show current balances, intraday and
end-of-day projections, inflows and outflows, projected
LNNCP, and available liquidity resources, including pre-
pledged and qualifying collateral and available credit lines.

Settlement activity is monitored across real-time gross
settlement (RTGS) systems, correspondent banks and
other relevant financial market infrastructures (FMIs).

Incoming and outgoing payments, and their settlement
status, are updated based on real-time payment
messages, with expected flows continuously matched
to actual credit and debit advice.

Real-time alerts notify relevant first- and second-line
(1LoD and 2LoD) teams when predefined conditions
are met. Treasury can actively monitor intraday
developments through a role-specific dashboard or
step in immediately when alerts are triggered, detailing
ownership, status, and resolution-tracking.

Users can filter, sort and drill down to investigate
unexpected balance movements, payment delays or
counterparty behaviour. Views are available at a group or
entity level, by counterparty, currency or FMI. For non-
material currencies, intraday usage and LNNCP can be
monitored on an ex-post basis.

Configurable dashboards provide easy access to
key information including live balances, upcoming
time-sensitive payments, short-term projections with
trendlines, and counterparty-level payment patterns to
support rapid identification and investigation of
intraday liquidity pressures.

See Baton’s real-time intraday monitoring tools

Key Baton Functions

.....

¯ Balance Manager

¯ Exposure Manager

What this enables

¯ Alerts Manager

Real-time visibility of balances, projections and LNNCP
across all chosen currencies including historical context

Faster identification and investigation of unexpected
intraday liquidity pressures

Shared situational awareness across Treasury,
Risk and Operations

Real-time intraday monitoring and escalation

Monitored inputs

▶ Live balances and cash flows

▶ Intraday and end-of-day projections

▶ LNNCP (Largest Negative Net Cumulative Position)

▶ Collateral and credit lines

▶ Payments and settlement status

Consolidated,
real-time view

Drill-down
by currency, entity,
counterparty, FMI

Alerts and Notifications

▶ Threshold breaches

▶ Projected shortfalls

▶ Time-sensitive payment risk

Teams

▶ Treasury

▶ Risk (1LoD / 2LoD)

▶ Operations

Investigation views

Upcoming TSOs
and other priority
payments

Short-term
projections and
trendlines

Counterparty
payment patterns

See Baton’s real-time intraday monitoring tools

ECB Principle 5

Active management of outflows

ECB focus

Institutions should actively manage intraday
outflows to ensure time-specific payments
are made on time, while duly prioritising
other payments within available liquidity
under BAU and stressed conditions.

Baton enables real-time active control of intraday payment outflows, aligning settlement activity with actual and expected liquidity conditions throughout the day.

Payments are organised into an explicit outflow ladder,
with mandatory TSOs and other priority payments clearly
distinguished. Institutions can configure thresholds
to define their BAU liquidity levels within which cash
operations manage payments using automated payment
orchestration capabilities. As liquidity levels approach
BAU buffer thresholds, alerts notify relevant
1LoD and 2LoD teams, enabling Treasury and Risk to intervene
before buffers are exhausted.

Payment release decisions are governed by rules that combine:

Payments can be prioritised, sequenced or throttled, with
throttles adjusted based on predefined conditions, such
as time or circumstance, to ensure all payments due are
made within the day.

In stressed conditions, controls can be set to reflect a
hierarchy of liquidity usage, reserving capacity for TSOs
and other priority payments. Outflows can be actively
managed across all material currencies, including via RTGS
where available. Where active management is constrained,
automated prioritisation ensures TSOs are met on time.

All release decisions are transparent, auditable and
subject to human override, with clear lineage from
forecast inputs to execution.

Learn how Baton enables active intraday outflow management

Key Baton Functions

¯ Managing Outflows

¯ Forecasting

¯ Alerts Manager

What this enables

Predictable, controlled real-time management
of payment outflows

Reduced peak liquidity usage and intraday
borrowing

Active protection of TSOs under BAU and stressed
conditions

Stronger operational and liquidity resilience with
full auditability

Execution ladder

Controlled
payment
release

3

Sequencing
and throttling

Available
liquidity (BAU
and stress
buffers)

Payment
priorities
(TSOs / TSPs)

Human oversight and auditability

Treasury

Risk

Alerts

Learn how Baton enables active intraday outflow management

Supporting the broader intraday liquidity risk management framework

Beyond forecasting, monitoring and managing outflows, Baton supports key elements of the
wider intraday liquidity risk management framework, including:

Principles 1 & 2:
Risk Management
Framework and
governance

Granular intraday data,
indicators and alerts
support escalation and
oversight across Treasury,
Risk and Operations, with
consistent reporting and
audits trails that strengthen
governance and review.

$ € ₹ ⚡

Principle 6: Sources of liquidity

Enterprise-wide visibility
of intraday liquidity sources
by currency and entity
supports prioritisation
and timely mobilisation
of funding in BAU and
stressed conditions.

Principle 7: Stress testing

Scenario analysis
using live and historical
intraday data supports
intraday buffer calibration
and preparedness for
idiosyncratic and
market stress.

Baton’s modular intraday liquidity management capabilities allow
institutions to address specific ECB supervisory expectations today.

This interoperable, scalable foundation can be extended over time
to support more active liquidity risk management and settlement
optimisation.

Address ECB intraday liquidity expectations, by focusing
on the areas where your firm has an immediate requirement

Download Baton’s ECB intraday liquidity risk management white paper
Speak to Baton about your intraday liquidity priorities