Tool aims to help firms understand liquidity profile under normal and stressed conditions
Interactive Data, a provider of fixed-income evaluated pricing, today announced the launch of its Liquidity Indicators Service, which leverages the company's fixed-income evaluated pricing and reference data content.
Understanding liquidity risk is a top priority for many global financial institution, says Andrew Hausman, president of pricing and reference data at Interactive Data. "This was confirmed in the feedback we received during a recent pilot program, particularly with mutual fund companies, given applicable regulatory guidelines and responsibilities to service shareholder redemptions on a daily basis."
"Our clients need to have confidence in their risk assessments, including analysis of their ability to exit a position at a particular price and the overall liquidity profile of their portfolio relative to the market," says Hausman.
The Liquidity Indicators are designed to support firms' liquidity risk management needs during all economic cycles, even in stressed markets. They can be used to analyze a security's liquidity compared to other securities in various groupings including issuer, sector, asset class, or against bonds with similar risk characteristics, such as yield or duration.
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