Liquidity risk management

Abstract

Liquidity risk management is a major activity of every bank. To be able to honor its matured liabilities, a bank strives to provide and maintain the required level of liquidity on a daily basis. Although each commercial bank has its own methodology of calculating the required liquidity level, in line with its adopted policies, the central bank has enacted the Decision on Liquidity Risk Management, prescribing the obligatory liquidity risk management policy.

Keywords

• financial risk
• liquidity risk
• exposure