HSBC 2012 Annual Report Download - page 218

HSBC HOLDINGS PLC
Report of the Directors: Operating and Financial Review (continued)
Risk > Liquidity and funding > Liquidity regulation // Market risk
216
Cash flows payable by HSBC Holdings under financial liabilities by remaining contractual maturities
(Audited)
On
demand
Due within
3 months
Due between
3 and 12
months
Due between
1 and 5 years
Due after
5 years
US$m US$m US$m US$m US$m
At 31 December 2012
Amounts owed to HSBC undertakings ................... 3,032 604 1,096 1,918 7,570
Financial liabilities designated at fair value ............ – 269 807 5,345 31,970
Derivatives ............................................................... 760 – – – –
Debt securities in issue ............................................ – 36 107 1,946 1,487
Subordinated liabilities ............................................ – 205 614 3,273 25,049
Other financial liabilities ......................................... – 394 211 – –
3,792 1,508 2,835 12,482 66,076
Loan commitments .................................................. 1,200 – – – –
Financial guarantees and similar contracts ............. 49,402 – – – –
54,394 1,508 2,835 12,482 66,076
At 31 December 2011
Amounts owed to HSBC undertakings ................... – 1,110 81 1,428 –
Financial liabilities designated at fair value ............ – 281 3,530 4,987 28,988
Derivatives ............................................................... 1,067 – – – –
Debt securities in issue ............................................ – 35 104 1,975 1,490
Subordinated liabilities ............................................ – 216 649 3,461 27,558
Other financial liabilities ......................................... – 1,252 208 – –
1,067 2,894 4,572 11,851 58,036
Loan commitments .................................................. 1,810 – – – –
Financial guarantees and similar contracts ............. 49,402 – – – –
52,279 2,894 4,572 11,851 58,036
Liquidity regulation
(Unaudited)
In December 2010, the Basel Committee published
the ‘International framework for liquidity risk
measurement, standards and monitoring’. The
framework comprises two liquidity metrics: the
liquidity coverage ratio (‘LCR’) and the net stable
funding ratio (‘NSFR’). The ratios are subject to
an observation period that began in 2011, and are
expected to become established standards by 2015 and
2018, respectively. During the observation period, the
standards are under review by the Basel Committee.
In January 2013, the Basel Committee announced
several changes to the calibration of the LCR which
included reducing the outflow applied to non-
operational non-financial corporate deposits from
75% to 40% and reducing the outflow applied to
committed liquidity facilities from 100% to 30%.
A significant level of interpretation is required
applying the definitions as currently drafted, in
particular, the definition of operational deposits.
Uncertainty around LCR also arises from the fact that
the implementation of the Basel LCR framework still
requires EU endorsement. In addition, the final
calibration of the NSFR is highly uncertain and is
expected to remain so, with no announcement on this
expected from the Basel Committee until 2014.