Liquidity and Net credit/debit position: Difference between pages

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1.  
''Netting systems''.  


An asset's ability to be turned into cash quickly and without significant loss compared with current market value.
A participant’s net credit or net debit position in a netting system is the sum of the value of all the transfers the participant has received up to a particular point in time, minus the value of all the transfers the participant has sent.


If the difference is positive, the participant is in a net credit position. 


2.  
If the difference is negative, then the participant is in a net debit position.  


An entity’s ability to pay its obligations when they fall due, especially in the short term.


The net credit or net debit position at settlement time is defined as the net settlement position. 


3.
These net positions may be calculated on a bilateral or multilateral basis.
 
An entity's ability to source additional funds to meet its obligations, including in the medium and longer term.
 
 
4.
 
A financial measure designed to quantify an entity's ability to meet its obligations when they fall due.
* For non-financial organisations, simple measures of liquidity include the ''current ratio'' and the ''quick ratio''.
* For banks and other financial institutions, liquidity measures include those which identify how long the bank could survive if wholesale funds were to dry up and retail funding was heavily stressed. This period is known as the ''survival period''.




== See also ==
== See also ==
* [[Authorisation]]
* [[Credit]]
* [[Authority limits]]
* [[Debit]]
* [[Cash and cash equivalents]]
* [[Netting]]
* [[Cash forecasting]]
* [[Cash pool]]
* [[CertICM]]
* [[CRD IV]]
* [[Current ratio]]
* [[Deep market]]
* [[Funding]]
* [[Headroom target]]
* [[Illiquid]]
* [[Liquidate]]
* [[Liquidation]]
* [[Liquidity buffer]]
* [[Liquidity Coverage Ratio]]
* [[Liquidity preference]]
* [[Liquidity management]]
* [[Liquidity premium]]
* [[Liquidity risk]]
* [[Money management]]
* [[Net Stable Funding Ratio]]
* [[Quick ratio]]
* [[Run]]
* [[Security]]
* [[Solvency]]
* [[Stress]]
* [[Supply chain finance]]
* [[Survival period]]
* [[Yield]]
 
 
=== Other resources ===
*[[Media:2015_06_June_-_Safety_first.pdf| Safety first, The Treasurer, 2015]]
 
[[Category:Liquidity_management]]

Revision as of 08:24, 11 April 2015

Netting systems.

A participant’s net credit or net debit position in a netting system is the sum of the value of all the transfers the participant has received up to a particular point in time, minus the value of all the transfers the participant has sent.

If the difference is positive, the participant is in a net credit position.

If the difference is negative, then the participant is in a net debit position.


The net credit or net debit position at settlement time is defined as the net settlement position.

These net positions may be calculated on a bilateral or multilateral basis.


See also