Liquidity Risk [electronic resource] : Managing Funding and Asset Risk /
Banks, E.author.
Liquidity Management is now a core consideration for banks and other financial institutions following the collapse of numerous well-known banks in 2007-8. This timely new edition will provide practical guidance on liquidity risk and its management – now mandatory under new regulation.
Description based upon print version of record.
Cover; Title; Copyright; Content; List of Figures; List of Tables; List of Boxes; Preface to the 2nd Edition; About the Author; List of Abbreviations; Part I Elements of Corporate Liquidity; 1 Liquidity Risk Defined; Definitions of Liquidity Risk; Liquidity, Risk, and the Corporation; Market Risk, Credit Risk, and Liquidity Risk; Liquidity risk and the financial crisis of 2007-2008; The role of liquidity in the crisis; Lessons from the crisis; Overview of the Book; 2 Liquidity and Financial Operations; Liquidity Operating Requirements; General Approaches to Liquidity Management
Financial ImperativesExternal Requirements; The Liquidity Risk/Return Trade-Off; Liquidity Profiles Across Industries; Financial institutions; Non-financial service companies; Capital-intensive companies; Municipalities and sovereigns; Endogenous Versus Exogenous Liquidity; 3 Sources of Liquidity; Sources of Asset Liquidity; Liquid assets; Cash and marketable securities; Receivables; Inventories; Fixed assets and intangibles; Fixed assets; Intangibles; Sources of Funding Liquidity; Short-term funding markets; Commercial paper, Euro commercial paper; Short-term bank facilities; Payables
Deposits and repurchase agreementsMedium/long-term funding markets; Medium-term notes and Euronote facilities; Funding agreements and GICs; Long-term bonds; Loans; Equity capital; Sources of Off-Balance Sheet Liquidity; Securitization; Contingent financings; Leases; Derivatives; Amalgamating Liquidity Sources; Part II Liquidity Problems; 4 Funding Liquidity Risk; Sources of Funding Liquidity Risk; Unpredictable cash flows; Corporations; Financial institutions; Unfavourable legal or regulatory actions; Mismanagement; Negative perceptions/market actions; Exogenous Considerations
The Nature of Funding ProblemsRollover problems; Lack of market access; Commitment withdrawal; Excessive concentrations; The effects of funding liquidity risk; 5 Asset Liquidity Risk; Sources of Asset Liquidity Risk; Exogenous Considerations; The Nature of Asset Problems; Lack of asset marketability; Lack of unencumbered assets; Excessive concentrations; Misvalued assets; Insufficient collateralization; The Effects of Asset Liquidity Risk; 6 Liquidity Spirals and Financial Distress; Joint Asset and Funding Risks; Problems; Causes; The Liquidity Spiral; Problems; Causes
Debt investors and banksRating agencies; Management reaction; Financial Distress; Contagion; 7 Case Studies in Liquidity Mismanagement; Drexel Burnham Lambert (1990); Askin Capital (1994); Orange County (1994); Long Term Capital Management (1998); General American (1999); Swissair (2001); Enron (2001); Northern Rock (2008); Lehman Brothers (2008); Part III Managing Liquidity Risks; 8 Measuring Liquidity Risk; Common Liquidity Measures; Liquidity ratios; Cash flow gaps; Financial instrument liquidity measures; Stress tests; Stress testing framework; Market parameters; Liquidation horizon
Cash flows
Includes bibliographical references and index.
Liquidity Management is now a core consideration for banks and other financial institutions following the collapse of numerous well-known banks in 2007-8. This timely new edition will provide practical guidance on liquidity risk and its management – now mandatory under new regulation.
Business enterprises—Finance.
Risk management.
Investment banking.
Securities.
Corporations—Finance.
Banks and banking.
Business Finance.
Risk Management.
Investments and Securities.
Corporate Finance.
Banking.