Funding liquidity risk: Difference between revisions
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1. | |||
The risk of an organisation's inability to obtain funds to meet its own obligations. | The risk of an organisation's inability to obtain funds to meet its own obligations. | ||
Contrasted with, though also overlapping, market liquidity risk. | Contrasted with, though also overlapping, market liquidity risk. | ||
2. ''Banking'' | |||
In relation to banks, funding liquidity risk is the risk that a bank does not have sufficient cash or collateral to make payments to its counterparties and customers as they fall due (or can only do so by liquidating assets at excessive cost). | |||
In this case the bank has defaulted. | |||
This is sometimes referred to as the bank having become ‘cash flow insolvent’. | |||
== See also == | == See also == | ||
*[[Cash flow insolvent]] | |||
*[[Collateral]] | |||
*[[Funding]] | |||
*[[Guide to risk management]] | |||
* [[Liquidity]] | |||
*[[Liquidity Coverage Ratio]] | |||
*[[Liquidity risk]] | *[[Liquidity risk]] | ||
*[[Market liquidity risk]] | *[[Market liquidity risk]] | ||
*[[Net Stable Funding Ratio]] | |||
*[[Run]] | |||
[[Category:Financial_management]] | |||
[[Category:Identify_and_assess_risks]] | |||
[[Category:Manage_risks]] | |||
Latest revision as of 20:49, 4 July 2022
1.
The risk of an organisation's inability to obtain funds to meet its own obligations.
Contrasted with, though also overlapping, market liquidity risk.
2. Banking
In relation to banks, funding liquidity risk is the risk that a bank does not have sufficient cash or collateral to make payments to its counterparties and customers as they fall due (or can only do so by liquidating assets at excessive cost).
In this case the bank has defaulted.
This is sometimes referred to as the bank having become ‘cash flow insolvent’.
