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Liquidity Risk
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Liquidity Risk, liquidity management, Financial institutions, financial risk management, risk management, financial risk, banking, operational risk, credit risk, risk mitigation, financial risk manager, financial risk analysis, bank
Industry :
Banking, Asset Management
Functional Area : Business Processes, Capital Management |
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About "Liquidity Risk" topic:
Treasurers of financial institutions, corporations, and government organizations must respond to an environment where liquidity, funding and capital management are increasingly scrutinized. Share insights on cash flow forecasting, asset/liability management, capital markets funding structures, treasury and risk systems, treasury organization and design, internal controls and governance, currency, interest rate and commodity risk management, and global cash and bank relationship management.
2 insight
, 1 debates
, 3 idea contests
, 4 question
on topic: "Liquidity Risk"
Prev1NextShowing 1 - 10 of 10
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I am sure all are aware of the credit crunch in today's scenario. The present credit squeeze situation is arising out of the overstretching of the deployment of bank’s resources, as evident from the credit deposit ratio of 75.16 per cent, investment deposit ratio of 28.27 per cent and cash deposit ratio of 9.89 per cent, the cumulative total of which exceeds 113 per cent of the deposits as on October 10. It is, therefore, obvious that the excess 13 per cent comes from equity and float funds. The foreign investment outflows and drying up of funds from issue of drafts due to successful implementation of core banking projects in most of the banks ensure that the quantum of float funds that are...
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Sanjay Thakur
| Commented
| 2 years ago
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Hi, The excess of 13% is not new as this has been case in past as well. What important here is the drying liquidity in placing/taking market (inter-bank market) which means non-availability of fund (of specific maturity, denomination etc.) or...
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Insight: "Liquidity crunch in India" deleted from your view.
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opportunity in crisis
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Increase liquidity
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Ankit Gandhi
| Supported idea
"opportunity in crisis"
| 2 years ago
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yes, I Totally agree with Mr.Sandesh Saboo it's a good attitude to seen that whatever difficulties we have taken in the very positive mannaer. So, In contex of liquidity crisis according to you lots of opportunities are there if corporates and...
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sandesh saboo
| Added idea
"opportunity in crisis"
| 2 years ago
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this is a opportunity for those who are having excess funds. a)business buy outs b) those running business need to be told to have enough funds to tackle slow downs,fall in sales.say having six months expenses tied up. or having a reserve which...
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Ideate: "How liquidity crisis can be tackled?" deleted from your view.
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(rate this)
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Liquidity may be measured based on cashflow analysis.
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Liquidity may be measured based on ratio analysis.
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MAJETY CHANDRA SHEKHAR
| Argues in support of
"Liquidity may be measured based on cashflow analysis."
| 2 years ago
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A bank is responsible for the sound management of liquidity risk. A bank should establish a robust liquidity risk management framework that ensures it maintains sufficient liquidity, including a cushion of unencumbered, high quality liquid...
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rajendra borikar
| Argues in support of
"Liquidity may be measured based on ratio analysis."
| 2 years ago
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As rightly opined by k s i fully agree that liquidity must always be judged by studying the changes in well defined rations and not by quamtum of cash flow. This is also as per widely accepted international accounting standard. so pl.
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Sanjay Thakur
| Argues in support of
"Liquidity may be measured based on cashflow analysis."
| 2 years ago
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Ratio Analysis is, no doubt, a useful tool. However, cash flow analysis help understand real quantum of cash/cash equivalent available than a relative figure supplied by a ratio. Secondly, and most importantly, bank focuses more on management of...
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Debate: "How to define and measure Liquidity,liquidity risk tolerance and cushion value for a bank?" deleted from your view.
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Answer: "Do we need RBI's specific approval for Implementation of internal models for the Liquidity Risk?" deleted from your view.
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Gaurav Saha
| Answered
| 3 years ago
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The current liquidity "crunch" (as you put it) last week was due to international investors expressing their concern over the role of domestic banks in the sub-prime loan. The expression of their concern was to divest themselves of the banking...
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veguru vijayakumar babu
| Answered
| 3 years ago
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In the Indian context, for controlling inflation, CRR (Cash reserve ratio of balances to be maintained by commercial banks with RBI) was raised earlier, Repo rate, i,e, the rate at which RBI lends funds to banks was also raised earlier. These...
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Answer: "What Caused Liquidity Crunch?" deleted from your view.
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Global markets are currently going through a worst phase due to the failure of top banks in US and Europe and the attendant financial crisis. Indian stock markets are following the direction of global markets and the end result is obvious. For four days in a week stock market is ending up negative by substantial margins. From a level of 14000 not long ago, SENSEX lost more than 3500 points and is currently at 10500 points on 16th 0ct 08. FII outflows are unabated. Indian investors are scary about the developments around and panic selling is taking place. Earlier, in order to control the high level of inflation, CRR ( cash reserve ratio ) was hiked several time to restrict the fund suppl...
Insight: "Domestic and Foreign currency liquidity" deleted from your view.
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Liquidity issues can interrupt hedging strategies and other risk management techniques. How do firms quantify or otherwise address these risks?
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Sanjay Thakur
| Answered
| 2 years ago
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Well, GAP analysis(using Time Bucket) is still the best way to see the structural liquidity needs and obligations coupled with short term liquidity measurement- focusing in rise/fall in liquidity flow within 90 days. If it is added with liquidity...
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Vikram Kashyap
| Answered
| 3 years ago
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I will use the example of building, owning and operating a new natural gas CC power plant. Some areas of liquidity risk that immediately come to mind include how much cash is tied up at any point in time, ability to raise debt, credit risk with...
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Answer: "What methods are firms using to access liquidity risk and its effect on risk management techniques?" deleted from your view.
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The slight uptick in inflation figures seem to have revived fears
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An aggressive monetary stimulus looks well warranted
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Prakash Khairnar
| Added idea
"The slight uptick in inflation figures seem to have revived fears "
| 3 years ago
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The liquidity infusion is not even able to compensate for the freezing and de-leveraging of credit markets, so how can it be inflationary? Crisis loans are normally made at penal rates to prevent moral hazard. But i think , rates have to be...
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Saurabh Ratnakar
| Added idea
"An aggressive monetary stimulus looks well warranted "
| 3 years ago
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I believe that the impact of the global financial crisis has actually affected the real economy. The odds of a rich-world recession are near-certain and emerging markets —which looked at the industrialised world’s financial turmoil from a distance...
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Ideate: "Effects of apex banks pumping in too much liquidity?" deleted from your view.
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people should start spending
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Reducing Interest Rates
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sandesh saboo
| Added idea
"people should start spending"
| 2 years ago
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more then the rbi if the general public understands that we are growing at a healthy rate and the business confidence is back and satrt spending as they would regularly do thing would come back and there would be no recession . those who have...
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Veena Gupta
| Supported idea
"Reducing Interest Rates"
| 3 years ago
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The repo rate cut is a welcome move by RBI and signals its focus on ensuring sufficient liquidity and smooth functioning of financial markets to support growth… but the impact on lending and deposit rates will have to be seen over time
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Ideate: "what more steps RBI should take to ease liquidity?" deleted from your view.
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Hi, The recent guidelines from basel committee's on LRM is very descriptive and detailed. It has also talked about 'sufficient liquidity', Liquidity risk tolerance limits, liquidity cushion, intra-da...
Answer: "Basel Committee's Guidelines on Liquidity Risk Management in Banks: Issues from Practice and Implementation" deleted from your view.
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