Sound liquidity management practices

Institutions must balance maintaining adequate liquidity sources, optimising maturity differentials between assets and liabilities, and ensuring a healthy mix of saleability and liquidity of assets. By adhering to these principles, institutions can better navigate funding challenges, prevent shortfalls and secure necessary capital during crises, ultimately enhancing long-term stability and profitability. 

Effective liquidity management is crucial for financial institutions to ensure stability and resilience in various market conditions. This white paper outlines three regimes of liquidity access: stable funding, temporary constraints and severe shocks.