Liquidity Risk Management Masterclass August 24, 2008

Recent turmoil in global financial markets has exposed vulnerabilities in the valuation and distribution of risks within the global financial system. Banks have seen a great number of amounts of unexpected losses, but more importantly has damaged their market reputation and trust.

The lack of trust is spiked mainly due to unexpected market conditions (market risk), changes in the counterparty’s behaviour (credit risk), severe losses (i.e., due to operational risk) and inefficient management of financial portfolios and products (i.e., Islamic contracts). Any failure in understanding and managing the above risk issues may result in down-ratings of the bank’s reputation that further reduces the level of confidence and trust.

Globally, in the last couple of decades the market is facing liquidity risk crises almost once every year. Today, banks that are trading and operating in the globalised market are directly or indirectly affected by such crises. New financial products, coming for instance from the Islamic finance, that may have global expansion in Asian, European and USA markets may also cause liquidity risk due to lack of understanding of their unique financial and risk characteristics.

Banks are now at the tasked to fuel their financial system to ensure that they remain liquid for good. Attend SALVO’s LIQUIDITY RISK MANAGEMENT MASTERCLASS and gain tips on how to:

1. Understand the causes and then measure, evaluate and manage their liquidity risk.
2. Regulate as nowadays also paying high attention to liquidity risk although that in the Basel II accord it was only mentioned under Pillar II in a very general sense. Moreover, ICAAP refers to risks that are not taken into account by Pillar I and provides to the regulatory authorities guidance in regards to liquidity risk management.
3. Find out how banks have the tough tasks to be liquid, from their counterparties that own their liabilities, whereas on the other hand the overall market is facing the problem of illiquidity due to the lack of marketability and tradability for liquidating financial products.

Official Website: http://www.salvoglobal.com/Salvo%20-%20LiquidityRisk.htm