Building a Defensible ILAAP

Introduction

The Internal Liquidity Adequacy Assessment Process, or ILAAP, is the mechanism by which a firm evidences to the PRA that it holds adequate liquidity resources and manages its funding risk prudently. For many firms it remains treated as an annual compliance exercise, produced to satisfy a regulatory return rather than used as a live management tool.

That approach carries a cost. A weak or generic ILAAP tends to attract closer supervisory attention and a larger Pillar 2 liquidity add-on, tying up assets that could otherwise support the business. A well-evidenced ILAAP shortens the supervisory conversation, supports the firm's standing with counterparties, and protects the individuals who carry personal accountability for liquidity adequacy under the Senior Managers Regime.

The 2023 banking turmoil and the PRA's resulting 2026 proposals to modernise the liquidity framework, have also changed what a credible ILAAP needs to demonstrate. This session will provide you with a practical, current understanding of what a strong ILAAP looks like, how the PRA reviews it and where most ILAAPs still fall short.

What You Will Learn

This live and interactive course will cover the following:

• Why ILAAP matters commercially, not just as a regulatory return
• The building blocks of a robust ILAAP, including risk appetite, stress testing and contingency funding
• How the PRA uses your ILAAP in its Liquidity Supervisory Review and Evaluation Process (L-SREP) and how it sets Individual Liquidity Guidance
• Who in your firm owns liquidity adequacy and what that means under the Senior Managers Regime
• What the PRA's 2026 liquidity reform proposals mean for your firm
• The pitfalls that most often trigger supervisory challenge, and how to avoid them

Recording of live sessions: Soon after the Learn Live session has taken place you will be able to go back and access the recording - should you wish to revisit the material discussed.