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Liquidity Risk Management in Financial Institutions: International Best Practices and Experiences


  • Miguel Delfiner

    () (Central Bank of Argentina)

  • Claudia Lippi

    () (Central Bank of Argentina)

  • Cristina Pailhé

    () (Central Bank of Argentina)


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.

Suggested Citation

  • Miguel Delfiner & Claudia Lippi & Cristina Pailhé, 2007. "Liquidity Risk Management in Financial Institutions: International Best Practices and Experiences," Ensayos Económicos, Central Bank of Argentina, Economic Research Department, vol. 1(46), pages 63-101, January -.
  • Handle: RePEc:bcr:ensayo:v:1:y:2007:i:46:p:63-101

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    References listed on IDEAS

    1. Mario Tonveronachi & Elisabetta Montanaro, 2009. "Some preliminary proposals for re-regulating financial systems," Department of Economics University of Siena 553, Department of Economics, University of Siena.
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    More about this item


    banking supervision; banks; Basel Committee on Banking Supervision; liquidity risk; risk management;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill


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