Prior to the current financial crisis, capital was seen as the primary factor in a financial institution’s viability. Capital and Liquidity are now considered to be of equal importance to the stability of the financial system. The UK regulator’s proposals on the new liquidity regime will set higher prudential standards for the management of liquidity risk, resulting in better corporate governance, enhanced measurement techniques and better management practices. Kim Patel consisders the implications of Liquidity Risk Management for financial institutions in light of recent proposals by the UK regulator, the Financial Services Authority.

Author:

Kim Patel - Senior Consultant