3.8.Basel Management

Liquidity risk management challenges
- Increased reliance on funding from the capital mkts
- Securitization
- Complexity of financial instruments
- Increase use of collateral agreements
- Automated pmts systems and intraday settlements
- Cross border flows
Approaches to supervise liquidity risk
- Liquidity policies
- Stress tests
- Contingency funding plan
- Setting limits
- Reporting
- Public disclosure
Key lessons from 2007 crisis
- Stress testing: include mkt-wide shocks
- Contingency funding plans: were too weak
- Off-balance sheet and contingent commitments
- Balance sheet management & internal transfer pricing
- Capital: should not be used in place of liq mgmt
- Central bank facilities
- Cross-border issues

Author

Exam9

ID

65097

Card Set

3.8.Basel Management

Description

Basel

Updated

2011-02-09T01:41:01Z

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