Liquidity Risk Management

Liquidity means being able to get the cash you need when you need it, but it also means that others must perceive you can do this so that cash remains available to you. In many banks, liquidity is taken for granted until some crisis makes it a focal point for bankers, regulators, and the public. Too often liquidity plans and policies are put in place in response to such events with little consideration of the real questions bankers need to address.

This manual gives you the guidance and the tools you need to take control of your bank's liquidity risk. No other resource takes you from the general principles of liquidity management to the specifics of what your bank needs to do, and gives you the tools you need to do it.

• Specific recommendations for liquidity management help you determine the actions you need to take.

• Bank-specific case studies and examples (including actual balance sheet data) make it easy to apply the methods and techniques to your bank.

• A sample liquidity policy and contingency plan give you a proven model to follow.

• Worksheets, ratios, formulas, and checklists help you save time and get the numbers right.