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Liquidity regulations are financial regulations designed to ensure that financial institutions (e.g. banks) have the necessary assets on hand in order to prevent liquidity disruptions due to changing market conditions. This is often related to reserve requirement and capital requirement but focuses on the specific liquidity risk of assets that ...
The liquidity shortfall in a stress scenario is thus given by the difference between the Liquidity-at-Risk associated with the stress scenario and the amount of liquid assets available at the point where the scenario occurs. The concept of Liquidity-at-Risk is used in stress testing. It is a conditional measure, which depends on the stress ...
In financial economics, a liquidity crisis is an acute shortage of liquidity. [1] Liquidity may refer to market liquidity (the ease with which an asset can be converted into a liquid medium, e.g. cash), funding liquidity (the ease with which borrowers can obtain external funding), or accounting liquidity (the health of an institution's balance sheet measured in terms of its cash-like assets).
The Federal Reserve System headquarters in Washington, D.C. The Bank of England in London The Reserve Bank of New Zealand in Wellington. In public finance, a lender of last resort (LOLR) is the institution in a financial system that acts as the provider of liquidity to a financial institution which finds itself unable to obtain sufficient liquidity in the interbank lending market when other ...
The establishment of the Indonesian Bank Restructuring Agency (IBRA) (Indonesian: Badan Penyehatan Perbankan Nasional, BPPN), lit. "National Banking Revitalization Agency") in early 1998 was one of a series of steps taken by the Indonesian government, in agreement with the International Monetary Fund on 15 January 1998, in response to the banking and economic crisis which emerged following the ...
Comprehensive Capital Analysis and Review (CCAR) is a United States regulatory framework introduced by the Federal Reserve in 2009 [1] to assess, regulate, and supervise large banks and financial institutions – collectively referred to in the framework as bank holding companies (BHCs).
Reserve requirement, a bank regulation that sets the minimum reserves each bank must hold. Quick ratio (also known as an acid test) or current ratio, accounting ratios used to determine the liquidity of a business entity; In accounting, the liquidity ratio expresses a company's ability to repay short-term creditors out of its total cash. It is ...
The FDIC discuss liquidity risk management and write "Contingency funding plans should incorporate events that could rapidly affect an institution’s liquidity, including a sudden inability to securitize assets, tightening of collateral requirements or other restrictive terms associated with secured borrowings, or the loss of a large depositor ...