Foreign exchange rate and Franchise viability risk: Difference between pages
From ACT Wiki
(Difference between pages)
imported>Doug Williamson (Add links.) |
imported>Doug Williamson (Classify page.) |
||
| Line 1: | Line 1: | ||
''Liquidity risk - banking.'' | |||
Franchise viability risk arises when a firm takes actions, despite having no legal obligation to do so, in order to preserve its reputation, and where these actions cause unforeseen liquidity outflows. | |||
Failing to take these actions may damage the firm’s franchise, which could impede access to wholesale markets or cause significant outflows. | |||
The associated outflows are uncertain before the event, as there is no associated contractual obligation. | |||
An example is agreeing to requests from debt investors to buy back debt immediately, before its contractual maturity. | |||
Sometimes abbreviated to ''franchise risk.'' | |||
== See also == | == See also == | ||
* [[ | * [[Bank]] | ||
* [[ | * [[Franchise]] | ||
* [[ | * [[Funding]] | ||
* [[ | * [[Funding liquidity risk]] | ||
* [[ | * [[Funding risk]] | ||
* [[ | * [[ILAA]] | ||
* [[ILAAP]] | |||
* [[Liquidity]] | |||
* [[Liquidity Coverage Ratio]] | |||
* [[Maturity mismatch]] | |||
* [[OLAR]] | |||
* [[Prudential Regulation Authority]] | |||
* [[Reputational risk]] | |||
[[Category:Identify_and_assess_risks]] | |||
[[Category:Manage_risks]] | [[Category:Manage_risks]] | ||
[[Category:Risk_frameworks]] | |||
[[Category:Liquidity_management]] | |||
Revision as of 08:03, 18 July 2020
Liquidity risk - banking.
Franchise viability risk arises when a firm takes actions, despite having no legal obligation to do so, in order to preserve its reputation, and where these actions cause unforeseen liquidity outflows.
Failing to take these actions may damage the firm’s franchise, which could impede access to wholesale markets or cause significant outflows.
The associated outflows are uncertain before the event, as there is no associated contractual obligation.
An example is agreeing to requests from debt investors to buy back debt immediately, before its contractual maturity.
Sometimes abbreviated to franchise risk.
