Management and Supervision of Liquidity Risk


Overview/Description
Target Audience
Expected Duration
Lesson Objectives
Course Number


Overview/Description
During the credit crisis of 2007, many of the problems were not a result of shortage of capital, but of enormous liquidity risk taken by banks. When the Basel Committee on Banking Supervision introduced the third Basel Accord, or Basel III, in December 2010, it required banks to have stronger liquidity standards as well as better risk management and supervision. As a result, Basel III introduced several liquidity risk measurement, management, and supervision tools and guidelines for banks, including two liquidity ratios to provide supervisors with important information required to assess the liquidity risk of a bank and to ensure that banks survive liquidity pressures. Basel III also introduced several principles that banks should follow for efficient management and supervision of their liquidity risk. This course discusses liquidity, liquidity risk, and its management. It introduces the two key liquidity risk ratios - the liquidity coverage ratio and the net stable funding ratio. The course then introduces various principles for governance, public disclosure, supervision, measurement, and management of liquidity risk at banks.

Target Audience
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

Expected Duration (hours)
1.0

Lesson Objectives

Management and Supervision of Liquidity Risk

  • match key features of Basel III to their descriptions
  • identify components of liquidity risk as outlined in Basel III
  • identify aspects of key liquidity risk ratios
  • recognize characteristics of liquidity risk
  • identify principles for sound liquidity risk management and supervision
  • distinguish between liquidity risk measurement and management principles
  • recognize characteristics of liquidity risk management
  • Course Number:
    fini_08_a01_bs_enus