Liquidity Risk Measurement, Monitoring, and Application of Standards
Financial services professionals, consultants, and sales professionals interested in providing or selling products and services to banks and other financial institutions, and everyone interested in knowing about liquidity risk exposure to banks and strategies to supervise and manage this risk in the light of Basel III
Please contact us for information about prerequisites.
Liquidity of a bank describes its ability to meet out its debt obligations as and when they arise without incurring unacceptably large losses. A sound liquidity risk management framework comprises an array of metrics, measurement, and monitoring tools to assist supervisors in identifying and analyzing liquidity risks. Basel III introduced several liquidity risk standards, including two liquidity ratios to assess the liquidity risk and to ensure that banks survive liquidity pressures. Basel III also introduced a set of monitoring tools aimed at capturing specific information related to a bank’s cash flows, balance sheet structure, available unencumbered collateral and certain market indicators.
This course presents a high-level view of common liquidity risk ratios, measurement and monitoring of liquidity risk, and application of liquidity risk management tools. It discusses key liquidity risk standards and tools for measuring and monitoring liquidity risk in banks. The course also provides a brief introduction to the key considerations in the application of liquidity standards in a bank.
Liquidity Risks and Metrics
- describe liquidity risk in banks
- identify baseline liquidity metrics
- describe liquidity risk in banks and identify baseline liquidity metrics
Liquidity Risk Ratios
- describe the numerator and denominator of the liquidity coverage ratio
- describe characteristics of the net stable funding ratio
- describe the numerators and denominators of the liquidity ratio and net stable funding ratio function
Liquidity Monitoring and Standards
- describe liquidity risk monitoring tools
- identify the key consideration in the application of liquidity standards
- describe liquidity risk monitoring tools and identify key considerations in the application of liquidity standards