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Managing liquidity crisis

Tags : Loans, liquidity risk management, liquidity management, managing risk, operational risk, liquidity risk, credit risk management, financial liquidity management, crisis management, liquidity crisis, managing risk
Industry : Asset Management
Functional Area : Capital Management
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About "Managing liquidity crisis" topic:

A liquidity crisis occurs whenever a firm is unable to pay its bills on time or lacks sufficient cash to expand inventory and production or violates some term of an agreement by letting some of its financial ratios exceed limits. It is the financial manager's job to ensure that this never happens. But it happens and all interests involved start to scramble to protect their positions. Discuss here how to Mange Liquidity Crisis and other realted topics.

1 insight , 4 debates , 1 idea contests , 1 question on topic: "Managing liquidity crisis"
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(rate this)
Yes 
5
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20
 No
DEEPIKA KALIA  |  Argues in support of  "No"  |  1 year ago
SHORT SELLING IS DONE BY THAT INVESTOR WHO HAS KNOWLEDGE ABOUT THE MARKET AND HIS DECISION IS NOT BASED ON MERE SPECULATION
Vipin Bhasin  |  Argues in support of  "Yes"  |  1 year ago
It is very good but not simple issue to discuss.. Puja n others said that small investors invest their money in market due to short selling permitted by SEBI. If it should banned then they didn't invest their money in market. But if we are taking...
puja priya  |  Argues in support of  "No"  |  3 years ago
Government should not banned the short selling because these days we have seen that many of our small investers invest their money in market.They are taking interest in market , if government ban then they will fear from investing their money and...
 support: 
 
 
Debate: "Should short-selling be banned?" deleted from your view.
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(rate this)
1 Lenders lack confidence
2 Enabling softer lending rates
Vivek Kumar  |  Added idea  "Lenders lack confidence"  |  3 years ago
I think ,the problem North Block must confront is the lack of confidence among lenders about sectors that were once considered profitable to lend to. Risk aversion is spreading to borrowers who are delaying decisions because of uncertainties in...
Karthikeyan P S  |  Added idea  "Enabling softer lending rates"  |  3 years ago
Cash-rich public sector enterprises have been advised not to seek competitive bids from banks for bulk deposits (more than Rs 1 crore) but to be content with card rates; usually competitive rates can rise two percentage points higher. The Finance...
 
 
Ideate: "Has all efforts been in the wrong direction?" deleted from your view.
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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...
Sanjay Thakur  |  Commented  |  2 years ago
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...
 
 
Insight: "Liquidity crunch in India" deleted from your view.
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(rate this)
Liquidity issues can interrupt hedging strategies and other risk management techniques. How do firms quantify or otherwise address these risks?
Sanjay Thakur  |  Answered  |  2 years ago
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...
Vikram Kashyap  |  Answered  |  3 years ago
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...
 
 
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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(rate this)
Yes it is a threat but manageable 
0
VS
5
 It is very dangerous and we are not good at handling it too
siva raman  |  Argues in support of  "It is very dangerous and we are not good at handling it too"  |  2 years ago
Yes. We are not good at it. For the simple reason, except in an emergency situation, like a war, indian administration is only self serving. the mountainous corruption of the government at all levels chips away the good work done by a few...
 support: 
 
 
Debate: "Terrorism is a great threat to or financial assets and investment values" deleted from your view.
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(rate this)
Yes 
1
VS
2
 No
Vipin Bhasin  |  Argues in support of  "Yes"  |  1 year ago
Yes it is better to hold our money if we go for investing our whole saving in product like ELSS, . And Invest that money in other areas according to right time. There are lots of area where we can invest our savings from short to long term...
Swati Raut  |  Argues in support of  "No"  |  2 years ago
It would have been great if you have mention the sides Mr. Fuzel. It always better to invest rather than having idel liquidity. ELSS is an efficient investment tool that offers the twin-advantage of healthy capital appreciation and reduced tax...
 support: 
 
 
Debate: "What can be better option for savings having idl liquidity or investing in short term product like ELSS etc ? any suggestions" deleted from your view.
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(rate this)
yes 
2
VS
2
 no idea!!
Dipika Das  |  Argues in support of  "no idea!!"  |  1 year ago
No idea..... and I don't think they are in crisis. Their growth seems to be steady..... was there any issue regarding this....... :) 
Saurabh  |  Argues in support of  "yes"  |  1 year ago
Yes much more is still to come up.Greece and Spain were just eye openers and European Union is also worried about the increasing debt burden on its member countries and only time will put forward the rest of the story.
 support: 
 
 
Debate: "Europe crisis is hidden and looks much more news to come up on the crisis." deleted from your view.
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