Liquidity Risk Management in Financial Institutions: International Best Practices and Experiences
This paper analyzes the best practices related to liquidity risk management in financial institutions, in terms of both the existing standards on the issue and their application in several countries. To this effect, the paper compiles, in the first place, the best practices issued by the Basel Committee on Banking Supervision (BCBS), and then reviews the developments in European countries monitored by the Committee of European Banking Supervisors (CEBS) as well as the sound liquidity risk management practices suggested by the US control agencies. Secondly, the paper surveys the individual experiences of countries that apply liquidity risk control policies, either through their supervision manuals or through regulation. It also includes the experiences of Latin American countries with a specific liquidity regulation as well as the domestic experience. It concludes that although the relevance of liquidity risk is widely recognized, given its particular characteristics in the different entities, the agencies in charge of defining the best practices on this matter have failed to establish a specific quantitative regulation; instead, they have only established general principles that may be used as a guide for risk management. Most countries under analysis have echoed these recommendations and, in some cases, they have given the entities enough freedom to apply internal methods, provided they meet the principles established therein, or they have created a guide for the institutions that have made no progress yet in this respect. Other countries, however, have implemented quantitative regulations.
Volume (Year): 1 (2007)
Issue (Month): 46 (January - March)
|Contact details of provider:|| Postal: |
Phone: (54-11) 4348-3582
Fax: (54-11) 4000-1257
Web page: http://www.bcra.gov.ar
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:bcr:ensayo:v:1:y:2007:i:46:p:63-101. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Federico Grillo)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.