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Aug 22, 2024 · Effective liquidity risk management involves ensuring the availability of sufficient cash, liquid assets, and accessible borrowing lines to meet both expected and unexpected liquidity needs.
- Will Kenton
Liquidity Risk: Management and Supervisory Challenges 3 In general, money market instruments tend to be more volatile than traditional retail deposits 3 and may pose additional challenges to liquidity risk management.
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This document highlights financial market developments that affect liquidity risk management, discusses national supervisory regimes and their components, and then outlines initial observations from the current period of stress and potential future work related to liquidity risk management and supervision.
For example, supervisors may release positive stress test results to assure the market that a bank will have continued liquidity and stability. Because this information directly affects...
Apr 5, 2011 · SWIFT. The financial crisis highlighted important gaps in liquidity risk management that have led a large number of financial institutions to improve their ability to face potential future crises and prepare for more stringent liquidity risk regulations.
risk management and supervision of banking systems. 1 The BCBS has long discussed the merits and challenges associated with the management of liquidity risk by banks. For example, it first published a framework for managing and measuring liquidity risk in 1992 and, more recently, in 2008, released a review of the principles for managing liquidity
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Following the 2008-09 Global Financial Crisis, regulators released guidance and focused their supervisory efforts across three core pillars: capital adequacy, soundness of internal controls and timely monitoring of emerging liquidity risks.
