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The liquidity reserve funding and management strategies

Thomas Heidorn and Christian Buschmann

No 210, Frankfurt School - Working Paper Series from Frankfurt School of Finance and Management

Abstract: This paper investigates the managing strategies of a bank's liquidity reserve in the broader context of the role of asset-liability management according to the liquidity issues of a banking organisation. Several types of liquidity are presented and how these are interconnected and how they might affect a financial institution's liquidity risk. When managing the liquidity reserve and its included assets, the following influencing factors need to be taken into account: Firstly, the banking organisation itself, with its business model, funding structure and related types of risk; secondly, national and international regulatory requirements have to be fulfilled and lastly, financial market behaviour and its participants need to have carefully watched and anticipated, in order to manage the risk which might arise from the liquidity reserve itself.

Keywords: Asset Liability Management; Liquidity Management; Liquidity Reserve; Reserve Assets (search for similar items in EconPapers)
JEL-codes: G18 G20 G24 G28 (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-ban
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:fsfmwp:210

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