Liquidity risk and Purchasing Managers' Index: Difference between pages

From ACT Wiki
(Difference between pages)
Jump to navigationJump to search
imported>Doug Williamson
(Add links.)
 
imported>Doug Williamson
(Add 2nd & 3rd definitions. Source: CIPS webpage https://www.cips.org/en-gb/who-we-are/news/uk-manufacturing-pmi-remains-stuck-at-six-and-a-half-year-low-in-july/)
 
Line 1: Line 1:
Liquidity risk has a number of important dimensions for the corporate treasurer.  
(PMI).


These include the corporate organisation as a whole, individual investments, and the wider markets for borrowing and lending.
1. ''Economic indicators - US.''


#For an organisation, liquidity risk is the risk that the organisation ceases to have access to the cash it needs in order to meet its financial obligations as they fall due. This can arise from a number of different causes, both internal and external to the organisation.
The US Purchasing Managers' Index measures new orders, production, employment and supplier deliveries, based on a survey of North American manufacturing businesses.
#For an individual investment, liquidity risk is the risk that the investment cannot be turned into cash quickly and without significant loss in value.
#Liquidity risk at the market level includes the drying up of borrowing markets, disrupting the financing of individual organisations.


It is an important measure of economic activity.


The overall aim of liquidity management is to ensure that the company can meet its payment obligations as they fall due.


Consequently, in its broadest terms, liquidity risk includes all the risks that adversely affect liquidity management, i.e. that impact the organisation's ability to pay.
The US PMI is published monthly by the US Institute for Supply Management.


When managing liquidity a treasurer needs to consider the wider environmental aspects such as the riskiness of the sector or industry, market and economic issues, as well as the more direct aspects of delivering liquidity to the business.


2. ''UK''.


For this reason liquidity risk is integrated with business strategy and the fortunes of the business itself, and corporate treasurers need to understand the business model of their organisations to properly manage liquidity risk.
A similarly-structured index for UK manufacturing.


The UK PMI is published by IHS Markit and the Chartered Institute for Procurement and Supply (CIPS).


For banks and other financial organisations, liquidity risk management is fundamentally important because of their maturity mismatch, combined with high levels of leverage.
 
3.
 
Similar indices for other economies.




== See also ==
== See also ==
* [[Chartered Institute for Procurement and Supply]]
* [[Institute for Supply Management]]
* [[PMI]]


* [[Authorisation]]
[[Category:The_business_context]]
* [[Authority limits]]
[[Category:Financial_products_and_markets]]
* [[Bank]]
* [[Cash]]
* [[Cash and cash equivalents]]
* [[Cash forecasting]]
* [[Cash pool]]
* [[CFP]]
* [[CRD IV]]
* [[Credit rating risk]]
* [[Current ratio]]
* [[Deep market]]
* [[Documentation risk]]
* [[Emergency liquidity assistance]]
* [[Flight to liquidity]]
* [[Funding]]
* [[Funding liquidity risk]]
* [[Funding risk]]
* [[Funds]]
* [[Gilts]]
* [[Guide to risk management]]
* [[Headroom target]]
* [[High Quality Liquid Assets]]  (HQLAs)
* [[Illiquid]]
* [[Individual Liquidity Guidance]]
* [[Insolvency]]
* [[Internal Liquidity Adequacy Assessment Process]]  (ILAAP)
* [[Leverage]]
* [[Leverage]]
* [[Liquid]]
* [[Liquidate]]
* [[Liquidation]]
* [[Liquidity]]
* [[Liquidity buffer]]
* [[Liquidity Coverage Ratio]]
* [[Liquidity fee]]
* [[Liquidity fund]]
* [[Liquidity gap]]
* [[Liquidity insurance]]
* [[Liquidity management]]
* [[Liquidity preference]]
* [[Liquidity premium]]
* [[Liquidity risk]]
* [[Liquidity run]]
* [[Liquidity stress]]
* [[Liquidity upgrade]]
* [[Market liquidity risk]]
* [[Market risk]]
* [[Maturity mismatch]]
* [[Money management]]
* [[Net Stable Funding Ratio]]
* [[Overall Liquidity Adequacy Rule]]  (OLAR)
* [[Prudential Regulation Authority]]
* [[Quick ratio]]
* [[Run]]
* [[Security]]
* [[Solvency]]
* [[Stress]]
* [[Supervisory Review and Evaluation Process]]  (SREP)
* [[Supply chain finance]]
* [[Survival period]]
* [[Yield]]
 
[[Category:Manage_risks]]
[[Category:Risk_frameworks]]
[[Category:Liquidity_management]]

Revision as of 14:25, 28 August 2019

(PMI).

1. Economic indicators - US.

The US Purchasing Managers' Index measures new orders, production, employment and supplier deliveries, based on a survey of North American manufacturing businesses.

It is an important measure of economic activity.


The US PMI is published monthly by the US Institute for Supply Management.


2. UK.

A similarly-structured index for UK manufacturing.

The UK PMI is published by IHS Markit and the Chartered Institute for Procurement and Supply (CIPS).


3.

Similar indices for other economies.


See also