Liquidity stress test: Difference between revisions

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The European Securities and Markets Authority defines liquidity stress testing as a risk management tool within the overall liquidity risk management framework of an asset manager which simulates a range of conditions, including: normal and stressed (i.e. extreme, unlikely or unfavourable) plausible conditions, to assess their potential impact on the funding (liability), assets, overall liquidity of a fund and, the necessary follow-up action.
In the regulatory context, the European Securities and Markets Authority (ESMA) defines liquidity stress testing as a risk management tool - within the overall liquidity risk management framework of an asset manager - which simulates a range of conditions, including: normal and stressed (i.e. extreme, unlikely or unfavourable) plausible conditions, to assess their potential impact on the funding (liability), assets, overall liquidity of a fund, and - importantly - the necessary follow-up action.


The UK's Financial Conduct Authority follows this definition.
The UK's Financial Conduct Authority (FCA) follows this definition as well.




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* [[Financial Conduct Authority]]  (FCA)
* [[Financial Conduct Authority]]  (FCA)
* [[Fund]]
* [[Fund]]
* [[Funding]]
* [[Idiosyncratic stress]]
* [[Idiosyncratic stress]]
* [[Liquidity]]
* [[Liquidity]]
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==Other resources==
==Other resources==
*[https://www.fca.org.uk/publications/multi-firm-reviews/liquidity-management-multi-firm-review Liquidity stress testing - liquidity management multi-firm review]]
*[https://www.fca.org.uk/publications/multi-firm-reviews/liquidity-management-multi-firm-review Liquidity stress testing - liquidity management multi-firm review - UK Financial Conduct Authority (FCA) - 2023]
*[https://www.handbook.fca.org.uk/L3G/UCITS/esma34-39-882_final_report_guidelines_on_lst_in_ucits_and_aifs.pdf Guidelines on liquidity stress testing in UCITS and AIFs - European Securities and Markets Authority (ESMA) - 2019]
*[https://www.handbook.fca.org.uk/L3G/UCITS/esma34-39-882_final_report_guidelines_on_lst_in_ucits_and_aifs.pdf Guidelines on liquidity stress testing in UCITS and AIFs - European Securities and Markets Authority (ESMA) - 2019]



Latest revision as of 08:32, 30 July 2024

1. Treasury - liquidity risk - liquidity risk management - stress testing - regulation - European Securities and Markets Authority (ESMA) - UK - Financial Conduct Authority (FCA).

(LST).

In the regulatory context, the European Securities and Markets Authority (ESMA) defines liquidity stress testing as a risk management tool - within the overall liquidity risk management framework of an asset manager - which simulates a range of conditions, including: normal and stressed (i.e. extreme, unlikely or unfavourable) plausible conditions, to assess their potential impact on the funding (liability), assets, overall liquidity of a fund, and - importantly - the necessary follow-up action.

The UK's Financial Conduct Authority (FCA) follows this definition as well.


2. Treasury - liquidity risk - liquidity risk management - stress testing.

Similar activity in other contexts.


See also


Other resources