The US Dollar Shortage in Global Banking and the International Policy Response

After completing this reading, you should be able to: Identify the causes of the U.S. Dollar shortage during the Great Financial Crisis. Evaluate the importance of assessing maturity/currency mismatch across the balance sheets of consolidated entities. Discuss how central bank…

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Liquidity Transfer Pricing: A Guide to Better Practice

By the end of this chapter, you should be able to: Discuss the process of liquidity transfer pricing (LTP) and identify best practices for the governance and implementation of an LTP process. Discuss challenges that may arise for banks during…

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Risk Management for Changing Interest Rates: Asset-Liability Management and Duration Techniques

After completing this reading, you should be in a position to: Discuss how asset-liability management strategies can help a bank hedge against interest rate risk. Describe interest-sensitive gap management and apply this strategy to maximize a bank’s net interest margin….

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Covered Interest Rate Parity Lost: Understanding the Cross-Currency Basis

After completing this chapter, you should be able to: Differentiate between the mechanics of FX swaps and cross-currency swaps. Identify critical factors that affect the cross-currency swap basis. Assess the causes of covered interest rate parity violations after the financial…

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Managing Nondeposit Liabilities

After completing this reading, you should be in a position to: Differentiate the various sources of non-deposit liabilities at a bank. Describe and calculate the available funds’ gap. Discuss the factors affecting the choice of non-deposit funding sources. Calculate the…

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Managing And Pricing Deposit Services

After completing this reading, you should be able to: Differentiate between the various transaction and non-transaction deposit types. Compare different methods used to determine the pricing of deposits and calculate the price of a deposit account using cost-plus, marginal cost,…

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Contingency Funding Planning

On completing this reading, you should be able to: Discuss the relationship between contingency funding plan and liquidity stress testing. Evaluate the key design considerations of a sound contingency funding plan. Assess the key components of a contingency funding plan…

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Liquidity Risk Reporting and Stress Testing

After completing this reading, you should be able to: Identify best practices for the reporting of a bank’s liquidity position. Compare and interpret different types of liquidity risk reports. Explain the process of reporting a liquidity stress test and interpret…

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Liquidity Stress Testing

After completing this reading, you should be able to: Differentiate between various types of liquidity, including funding, operational, strategic, contingent, and restricted liquidity. Estimate contingent liquidity via the liquid asset buffer. Discuss the matters about the liquidity stress test design,…

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Intraday Liquidity Risk Management

After completing this reading, you should be able to: Identify and explain the uses and sources of the Intraday liquidity Discuss the governance structure of the intraday risk liquidity management Differentiate between methods for tracking intraday flows and monitoring risk…

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