O'Reilly logo

Measuring and Managing Liquidity Risk by Francesco Fede, Antonio Castagna

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

13

A sort of conclusion: towards a new treasury?

13.1 INTRODUCTION

What are the likely future developments in the liquidity risk area? Obviously, answering such a question is very challenging because, even for the few topics treated in the previous chapters, state-of-the-art practices and metrics still have to be fully explored and some are a long way from being consolidated among practitioners and supervisors.

When analysing liquidity risk, the main thing to keep in mind is the specificity of each financial institution. Every bank is different from all other financial firms: it represents therefore a single case of study, with its peculiar balance sheet mix and dependence on funding sources, specific business models and processes. Understanding the bank, its customers' behaviour, its competitive environment, the characteristics of its assets and liabilities is a prerequisite not only to define sound risk management practices, but also to find a solution that best fits from the organization's point of view.

There is little value in writing pages about organization of the treasury or ALM functions let alone their missions: the best we could do would be to define a hypothetical organization that would not fit the actual structure of a real bank. Every financial firm is tasked with finding its own solutions based on its specific features. Nevertheless, there are some topics deserving further analysis because they represent the more likely “open issues” for some time to come and ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required