# 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:

- Historical counterparty payment settlement  
  behaviours and timings
- Scheduled obligations, TSOs and  
  other priority payments
- Live balances, reconciled cashflows  
  and in-flight payments
- Real-time variance tracking between  
  expected and actual flows

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:

- Intraday liquidity forecasts of expected positions  
and timings
- Confirmed inflows and real-time settlement status
- Payment priorities, cut-offs and throughput  
considerations

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**