Lessons in liquidity

The issue of liquidity risk has come under intense scrutiny since the credit crunch took hold in mid-2007. Christopher Jeffery quizzes Shaji Chandrasenan, director of specialist risk supervision at the Monetary Authority of Singapore, on the topic

Asia Risk: Should liquidity risk be explicitly included in regulatory capital - that is, brought explicitly into the Basel II capital framework? Was the failure to explicitly include liquidity risk management in Basel II a fundamental mistake? If it was not a mistake and liquidity risk is considered under the market, credit and operational risk components, should its role have been articulated