Guidelines
 Published Date: 01 March 2013

Guidelines on Risk Management Practices – Liquidity Risk

Guidelines for financial institutions on managing their liquidity risk.
Applies to: Full Bank (Locally Incorporated) , Full Bank (Branch) , Wholesale Bank (Branch) , Wholesale Bank (Locally Incorporated) , Finance Company , Merchant Bank (Locally Incorporated) , Merchant Bank (Branch) , Direct Insurer (Life) , Direct Insurer (General) , Direct Insurer (Composite) , Reinsurer (Life) , Reinsurer (General) , Reinsurer (Composite) , Captive Insurer , Lloyd's Asia Scheme , Financial Holding Company (Insurance) , Dealing in Capital Markets Products , Product Financing , Licensed Fund Management Company , Corporate Finance Advisory , REIT Management , Registered Fund Management Company , Credit Rating Agency , Securities Crowdfunding , Venture Capital Fund Management Company , Exempt Futures Broker , Exempt OTC Derivatives Broker , Providing Custodial Services , Exempt Corporate Finance Adviser Serving Accredited Investors , Approved CIS Trustee , Exempt Trust Company , Licensed Trust Company , Exempt Person Providing Trust Services , Clearing House , Credit/Charge Card Issuer , Major Payment Institution , Standard Payment Institution , Money-changing Licensee
View Document Guidelines on Risk Management Practices – Liquidity Risk (349.1 KB)

Liquidity risk is the risk of an institution’s inability to meet its financial obligations as they fall due without incurring unacceptable cost or losses. These guidelines provide financial institutions with guidance on the key principles of, and sound practices for liquidity risk management. 

The guidelines cover:

  • Governance and liquidity strategy.
  • Policies and procedures for sound liquidity risk management.
  • Measurement and management of liquidity risk.
  • Contingency funding plan, stress testing and scenario analysis, foreign currency management and asset encumbrance.