LCR Maturity · Liquidity coverage ratio and BCEAO liquidity risk management framework
Your liquidity risk management, measured against BCEAO requirements and turned into a costed action plan.
10 themes, a 5-level scale. And the action that moves each level to the next.
The framework’s 10 themes, already written from L1 to L5. One company, one business unit, or 300 at once.
LCR Maturity · Liquidity coverage ratio and BCEAO liquidity risk management framework
10 themes, 5-level scale.
Nordhavn Industries
53 / 100
They measure their maturity with Datamensio
An example
This could be your situation.
Take one company as an example: three sites, three spreadsheets, no shared answer.
Nobody can consolidate.
Nordhavn Industries, 2,400 people in Hamburg, Lyon and Porto. A client asks where the group stands. Each site answers in its own spreadsheet, with its own scales.
Three weeks, a single base.
One WAEMU Basel II/III prudential framework, liquidity coverage ratio (LCR) and BCEAO directive on liquidity risk management assessment launched across all three sites at once, from the managers’ interview notes. The framework was already written, its 10 themes and levels L1 to L5 too.
Two costs avoided before being committed.
A score of 53 out of 100, with the gap concentrated on three themes. The AI companion spotted that two actions duplicated those of another audit. The committee report took one sentence to request.
What it saved them
- 3sites measured on the same base, instead of three questionnaires to reconcile
- 2duplicate actions caught before the spend
- 1committee report, with no manual rework
These figures are an example. They could be yours.
The standard imposes processes. Datamensio says where you stand.
01
The framework is already written
Themes, questions and levels L1 to L5, all written. You do not start from an empty spreadsheet.
02
The score lands the same day
Online, by self-assessment link or in interview. Theme by theme, comparable over time.
03
The gap becomes a costed plan
Every step up carries its action. The AI prioritises on expected effect, not on the order of the standard.
04
Progress can be demonstrated
Campaign after campaign, against your target and against your own past. That is what your board asks for.
The maturity scale
One level, the next, and the action that links the two.
This mechanism (one level, the level above, and the action linking the two) is what turns an observation into a trajectory.
Are the deposit run off assumptions used in the ratio calculation justified and reviewed?
- N1
No documented assumptions. Regulatory rates are applied without segmentation of the deposit base.
- N2
Segmentation exists and assumptions are written down, but their justification is not retained and they have not been reviewed since being set.
- N3
Assumptions are documented, backed by a history of deposit behaviour and reviewed on a defined schedule, with validation by the ALM committee.
- N4
The review is systematic, gaps between observed behaviour and the assumptions used are measured and tracked, and assumptions are broken down by customer segment and currency.
- N5
Assumptions are recalibrated after each stress episode, compared against stress test results, and revisions are documented and presented to the governing body.
Action to move from L2 to L3
Rebuild twelve months of deposit movement history by segment, derive the run off rates to be used, record the method in a note approved at the next ALM committee, and add the review to the semi annual agenda.
« With Datamensio, we meet our objectives far more efficiently. The ERDF inspection services and our supervising ministry particularly appreciated an approach that gives them reliable data. »
Director, CCI 94CCI Île-de-France
« We believe this is the most suitable solution to scale our transformation project and measure impact according to our needs. »
Maja SucekChief Operating Officer, Interreg Danube
Rarely on its own
Frameworks combine. Put several together to cover your business, or have the AI write yours.
Take your first measurementon LCR.
What this framework covers
The liquidity coverage ratio measures the stock of high quality liquid assets against expected net cash outflows over a thirty day stress horizon. In WAEMU, it sits within the prudential framework applicable to credit institutions and financial companies, complemented by BCEAO requirements on internal liquidity risk management: a policy approved by the governing body, limits, stress scenarios, a contingency funding plan and periodic reporting to the Banking Commission. The ratio is an output. The framework that produces it is what supervision actually examines.
In practice, day to day management runs into simple questions that are rarely settled. Who decides how a security is classified among high quality liquid assets, and on what basis is that decision reviewed when the regional market tightens? Are retail deposit run off assumptions based on documented history or on regulatory default rates? Has the contingency funding plan been tested, or does it remain a document approved once and then filed away? Producing the ratio often relies on a spreadsheet controlled by a single person, which leaves a fragile audit trail.
One confusion comes up repeatedly: reducing liquidity to the LCR alone. The framework also expects a structural view of funding, monitoring of maturity mismatches by time band, management of collateral eligible with the Central Bank, and close attention to funding concentration, a sensitive issue in balance sheets where a handful of institutional depositors and the State carry significant weight. On top of this comes the foreign currency dimension and, for regional groups, the assumed free movement of liquidity between subsidiaries established in several member states, which deserves to be verified rather than assumed.
Prudential supervision asks whether the ratio is met at the reporting date: compliant or not. The maturity assessment asks a different question. What level of control does each component of the framework reach, from limit governance to the quality of the data feeding the calculation, and what specific action moves it up a level. The two complement each other: the assessment prepares for supervision and informs the trade off between the cost of the liquid asset portfolio and the safety cushion.
In Datamensio, the framework is ready to use and remains yours. The AI adjusts themes, questions and levels to your profile, whether a universal bank, a smaller institution or a subsidiary of a regional group, or builds a variant from your internal procedures and regulatory returns. Results are comparable across business units and over time.
Reference standard: WAEMU Basel II/III prudential framework, liquidity coverage ratio (LCR) and BCEAO directive on liquidity risk management
The themes assessed
Liquidity risk governance
Policy approved by the governing body, formalised risk tolerance, ALM committee roles, separation between management and control, review frequency.
Limits and alerts framework
Internal limits by horizon, currency and counterparty, early warning thresholds, escalation procedure, documented handling of breaches.
High quality liquid assets
Eligibility and classification criteria, haircuts applied, actual availability and absence of encumbrance, management of collateral eligible with the Central Bank, valuation control.
Cash outflow and inflow assumptions
Deposit segmentation, run off rates applied, treatment of off balance sheet commitments, inflow caps, justification and review of assumptions.
Data quality and ratio production
Sources feeding the calculation, consistency checks, reconciliation with accounting and regulatory returns, audit trail, reliance on manual processing.
Stress scenarios and stress tests
Idiosyncratic scenario, market wide scenario, combined scenario, survival horizon measured, use of results in funding decisions.
Contingency funding plan
Identification of refinancing sources, triggers, decision roles and chains, periodic testing, linkage with the business continuity plan.
Funding structure and concentrations
Monitoring of maturity mismatches by time band, funding diversification, reliance on institutional and public deposits, foreign currency funding, regional interbank refinancing.
Prudential reporting and management information
Production and submission of returns to BCEAO and the Banking Commission, internal dashboards, information to the governing body, handling of supervisory observations.
Control and continuous improvement
Permanent control of the framework, internal audit engagements, follow up of recommendations, updating of assumptions after an incident or market stress.
A short version of the framework is available for the online self-assessment.
Frequently asked questions
Does the assessment replace the regulatory calculation of the ratio?
No. Calculating and submitting the returns remains the responsibility of your systems and teams. The assessment evaluates the maturity of the framework that produces that figure: governance, assumptions, data quality, stress scenarios, contingency funding plan.
How is this different from a prudential inspection?
An inspection checks whether the threshold is met at a reporting date and concludes with a finding of compliance or a gap. The assessment positions each component of the framework on a progressive scale and identifies the action that moves it up a level. It prepares for inspection, it does not replace it.
How long does the assessment take?
The short version can be completed in one working session. The full version, run collaboratively across ALM, treasury, risk and permanent control, typically spans one to two weeks, with most of the time spent gathering evidence.
Can the framework be adapted to our institution?
Yes. Questions, levels and themes can be modified, and the AI can build a variant from your internal procedures, for example for a smaller institution or for a subsidiary within a regional group. The framework belongs to you.
Can several WAEMU subsidiaries be compared?
Yes. The same framework can be run across several entities, with a score by theme and a benchmark across business units as well as against previous assessments. A cross entity roadmap consolidates the action plans of the various subsidiaries.
How does this assessment fit with ICAAP and internal control?
The governance, limits and reporting requirements are largely shared. Findings from the liquidity assessment feed into ICAAP work and the internal control framework without duplicating actions, with the cross entity roadmap allowing them to be cross referenced.
What does the assessment actually produce?
A score by theme, the gap against the target you set, and the resulting action plan. The AI groups actions into a prioritised roadmap, and the service catalogue offers a solution against each item, with cost, timeframe and expected impact on the score.
Where is the data hosted?
In France, with OVH, backed up with Scaleway. No transfer outside the European Union. The AI models used can be selected, including from European providers.