Sound liquidity management practices
Effective liquidity management is crucial for financial institutions to ensure stability and resilience in various market conditions. This whitepaper outlines three regimes of liquidity access: stable funding, temporary constraints, and severe shocks.
Default Finastra
Institutions must balance maintaining adequate liquidity sources, optimizing maturity differentials between assets and liabilities, and ensuring a healthy mix of saleability and liquidity of assets. By adhering to these principles, institutions can better navigate funding challenges, prevent shortfalls, and secure necessary capital during crises, ultimately enhancing long-term stability and profitability.
