Liquidity Risk Management: Basics

Liquidity Risk Management: Basics

Intuition Publishing Pty Ltd
Updated Aug 26, 2020

Liquidity risk is typically managed on a day-to-day basis by the the bank's centralized treasury, with the asset liability committee responsible for strategic planning. Here we look at the organizational structures used by banks to mange liquidity risk. We also discuss liquidity cushions and bank tolerance of liquidity risk.