Green swan and Liquidity Coverage Ratio: Difference between pages

From ACT Wiki
(Difference between pages)
Jump to navigationJump to search
imported>Doug Williamson
(Create page - source - BIS)
 
imported>Doug Williamson
(Amend link.)
 
Line 1: Line 1:
''Risk management - systemic risk - climate-related risks''.
''Bank regulation''.


A green swan is a potentially extremely financially disruptive event leading to a systemic financial crisis, triggered by a climate-related event.
(LCR).


The term was popularised by Patrick Bolton, Morgan Després, Luiz Awazu Pereira da Silva, Frédéric Samama and Romain Svartzman in their 2020 book "The green swan - Central banking and financial stability in the age of climate change".
The LCR is a requirement under Basel III for a bank to hold high-quality liquid assets (HQLAs) sufficient to cover 100% of its net cash requirements over 30 days.  


It applies throughout the European Union.


== See also ==
The LCR has been implemented in stages from 2015, to reach the 100% requirement by January 2019.
* [[Black swan]]
 
* [[COVID-19]]
 
* [[Fat tail]]
It reduces the value to a bank of cash deposits of less than 30 days tenor because they are only worth the income on the HQLAs if a bank forecasts no short term cash receipts to cover repayment.
* [[Green swan]]
 
* [[Guide to risk management]]
The purpose of this requirement is to ensure that banks can manage stressed market conditions, under which the bank is assumed to suffer substantial outflows of the cash previously deposited with it.
* [[Heuristic]]
* [[Horizon scanning]]
* [[Moody's]]
* [[Optimal capital structure]]
* [[Optimisation]]
* [[Portfolio analysis]]
* [[Probability]]
* [[Redundancy]]
* [[Resilience]]
* [[Risk]]
* [[Stress test]]
* [[Unicorn]]
* [[Weighted average cost of capital]]




== External link ==
== See also ==
*[https://www.bis.org/publ/othp31.htm The green swan - Central banking and financial stability in the age of climate change]
* [[Basel III]]
* [[European Union]]
* [[Net Stable Funding Ratio]]
* [[Cash investing in a new world]]
* [[HQLA]]
* [[Level 1 liquid assets]]
* [[Level 2 liquid assets]]
* [[Leverage Ratio]]
* [[Liquidity buffer]]
* [[Liquidity risk]]
* [[LR]]
* [[OLAR]]
* [[Pillar 1]]
* [[Required Stable Funding]]
* [[Survival period]]


[[Category:The_business_context]]
[[Category:Compliance_and_audit]]
[[Category:Identify_and_assess_risks]]
[[Category:Liquidity_management]]
[[Category:Manage_risks]]
[[Category:Risk_frameworks]]
[[Category:Risk_reporting]]
[[Category:Financial_products_and_markets]]

Revision as of 11:55, 17 November 2016

Bank regulation.

(LCR).

The LCR is a requirement under Basel III for a bank to hold high-quality liquid assets (HQLAs) sufficient to cover 100% of its net cash requirements over 30 days.

It applies throughout the European Union.

The LCR has been implemented in stages from 2015, to reach the 100% requirement by January 2019.


It reduces the value to a bank of cash deposits of less than 30 days tenor because they are only worth the income on the HQLAs if a bank forecasts no short term cash receipts to cover repayment.

The purpose of this requirement is to ensure that banks can manage stressed market conditions, under which the bank is assumed to suffer substantial outflows of the cash previously deposited with it.


See also