The credit crisis has placed liquidity risk management front and center in the global banking industry, presenting some weighty challenges that global banks must address. Liquidity risk management is now a major focus for regulators, and global banks must navigate a range of regulatory requirements and guidance that is not always clear or well-aligned.
What is clear is that liquidity risk must be owned from the top of the organization down. Without maintaining a constant pulse on their liquidity position, banks can quickly face serious reputational damage or, worse, insolvency. From our perspective, there are six key challenges in effectively managing liquidity risk:
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