Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
16 Cards in this Set
- Front
- Back
|
Definition of liquidity |
Ability to meet cash and collateral obligations st reasonable cost |
|
|
Who is ultimately responsible for institutions liquidity risk? |
The board |
|
|
How frequently should the board review and approve liquidity strategy, policies, and procedures |
Annually |
|
|
Management is responsible for: |
Risk measurement and reporting, inter al controls, cfp, and liquidity buffer |
|
|
What should Alco have? |
Sufficient representation across functions that impact liquidity. Should actively monitor liquidity profile |
|
|
What should liquidity strategies identify? |
Pri.ary funding sources for meeting daily needs, as well as seasonal/cyclical fluctuations |
|
|
How frequently should management receive liquidity risk reports? |
Monthly |
|
|
How frequently should the board receive liquidity risk reports |
Quarterly |
|
|
T/f: banks should review and approve cash flow assumptions at least annually |
False, periodicallly |
|
|
How far out should cash flow projections go? |
1 year + |
|
|
T/f: banks should regularly stress test institution specific and marketwide events across multiple time horizons |
True |
|
|
Does contingency planning affect stress testing or vice versa |
Stress testing used to develop contingency plan |
|
|
Contingency funding plans should |
Identify stress events Assess levels of severity and timing Assess funding sources and needs |
|
|
Net noncore ratio= |
Noncore liabilities-short term investments/long term assets |
|
|
Core deposits % |
= core deps/total assets |
|
|
Net ST liabilities ratio |
ST liab-ST assets/total assets |
