# **TABLE OF CONTENTS**

|Section 1: Introduction: Motivation & Definition of Terms ........................................................ 1|
|---|
|A. Cashflow is King ................................................................................................................. 3|
|B. Liquidity Gaps ..................................................................................................................... 8|
|C. Funding Liquidity risk ......................................................................................................... 9|
|D. Market Liquidity risk ........................................................................................................ 11|
|E. Central Bank Liquidity ...................................................................................................... 13|
|F. Governance and Liquidity Management ........................................................................... 14|
|G. Stages of Funding Crisis ................................................................................................... 15|
|Section 2: Liquidity Risk Assessment ....................................................................................... 16|
|1.1 Liquidity factors ............................................................................................................... 16|
|1.2 Liquidity Indicators .......................................................................................................... 21|
|1.4 External warning triggers ................................................................................................. 28|
|1.5 Macro Factors .................................................................................................................. 28|
|Section 3: Liquidity Risk Management ..................................................................................... 33|
|2.1 Liquidity Principles .......................................................................................................... 33|
|2.2 Liquidity Controls ............................................................................................................ 34|
|2.3 Liquidity Reports ............................................................................................................. 36|
|2.4 Contingency Funding Plan (CFP) .................................................................................... 37|
|Section 4: Concluding Remarks ................................................................................................. 41|
|Annex I: Terms of Reference for Liquidity Reviews ................................................................ 44|
|Annex II: Liquidity Reports ....................................................................................................... 47|
|Appendix A: Funds Flow Analysis of the ABC Bank ............................................................... 54|
|Appendix B: Contingency Funding Plan Summary .................................................................. 59|
|Appendix C: Liquidity Information Requirements .............................................................. 61|
|Appendix D: Contingency Liquidity Plan (OCC) ..................................................................... 64|
|Annex III: BIS Principles for Sound Liquidity Risk Management and Supervision ................. 66|
|Bibliography ............................................................................................................................... 69|