Barclays 2009 Annual Report Download - page 290

288 Barclays PLC Annual Report 2009 www.barclays.com/annualreport09
Notes to the accounts
For the year ended 31st December 2009
continued
49 Liquidity risk continued
Term financing
Raising term funding is important in meeting the risk appetite of the Barclays Liquidity Framework. Barclays has continued to increase the term of issued
liabilities during 2009 by issuing:
– £15bn equivalent of public senior term funding
– £1.8bn equivalent of public covered bonds
– £21bn equivalent of structured notes
The Group has £4bn of publicly issued debt and £11bn of structured notes maturing in 2010.
Intraday liquidity
The need to monitor, manage and control intraday liquidity in real time is recognised by the Group as a critical process: any failure to meet specific intraday
commitments would have significant consequences, such as a visible market disruption.
The Group policy is that each operation must ensure that it has access to sufficient intraday liquidity to meet any obligations it may have to clearing and
settlement systems. Major currency payment flows and payment system collateral are monitored and managed in real time to ensure that at all times there
is sufficient collateral to make payments. In practice the Group maintains a significant buffer of surplus intraday liquidity to ensure that payments are made
on a timely basis. The Group actively engages in payment system development to help ensure that new payment systems are robust.
Day to day funding
Day to day funding is managed through limits on wholesale borrowings, secured borrowings and funding mismatches. These ensure that on any day and
over any period there is a limited amount of refinancing requirement. These requirements include replenishment of funds as they mature or are borrowed
by customers.
In addition to cash flow management, Treasury also monitors term mismatches between assets and liabilities, as well as the level and type of undrawn
lending commitments, the usage of overdraft facilities and the impact of contingent liabilities such as standby letters of credit and guarantees.
Diversification of liquidity sources
Sources of liquidity are regularly reviewed to maintain a wide diversification by currency, geography, provider, product and term. In addition, to avoid reliance
on a particular group of customers or market sectors, the distribution of sources and the maturity profile of deposits are also carefully managed. Important
factors in assuring liquidity are competitive rates and the maintenance of depositors’ confidence. Such confidence is based on a number of factors including
the Group’s reputation and relationship with those clients, the strength of earnings and the Group’s financial position.
Wholesale depositor split by counterparty type – Barclays Capital Other Other
central financial
Banks Corporates Governments banks institutions Total
%%%%%%
As at 31st December 2009 36 15 2 16 31 100
As at 31st December 2008 32 15 11 9 33 100
Wholesale depositor split by geography – Barclays Capital Rest of
US UK Other EU Japan Africa World Total
%%%%%%%
As at 31st December 2009 9 25 23 3 16 24 100
As at 31st December 2008 13 22 16 9 17 23 100
Funding structure
Global Retail and Commercial Banking, Barclays Wealth and Head Office Functions are structured to be self-funded through customer deposits and Barclays
equity and other long-term capital. The Barclays Capital and Absa businesses are funded through the wholesale secured and unsecured funding markets.
The ratio of customer loans to customer deposits and long-term funding has improved to 81% at 31st December 2009, from 93% at 31st December 2008.