liquidity contingency risk
- liquidity contingency risk
The risk that future events may require a materially larger amount of liquidity than the financial institution currently requires. One of the three primary components of liquidity risk along with mismatch liquidity risk and market liquidity risk.
Contingency risk arises from two closely related elements.
Financial and business terms.
2012.
Look at other dictionaries:
liquidity mismatch risk — liquidity mismatch or liquidity mismatch risk The expected amount of liquidity risk based on the mismatch between contractual amounts and dates for inflows and outflows. Also called funding gap, liquidity gap, or term liquidity risk. One of the… … Financial and business terms
liquidity franchise risk — The risk arising from the implied obligation of a bank to continue making new loans or other new business related cash flows in order to preserve its business franchise even though it may be having funding difficulties. One of two types of… … Financial and business terms
liquidity option risk — The risk that actual cash flows will occur on dates or in amounts different from the contractual maturity dates and amounts. Put option risk includes the rights of saving, checking, and money market depositors to withdraw funds. It also includes… … Financial and business terms
liquidity mismatch — or liquidity mismatch risk The expected amount of liquidity risk based on the mismatch between contractual amounts and dates for inflows and outflows. Also called funding gap, liquidity gap, or term liquidity risk. One of the three primary… … Financial and business terms
prudential liquidity — Liquidity held for liquidity contingency risk or as a safety cushion. Also called standby liquidity. American Banker Glossary … Financial and business terms
standby liquidity — Liquidity held for liquidity contingency risk. Also called prudential liquidity. American Banker Glossary … Financial and business terms
market liquidity risk — The potential that an institution cannot easily unwind or offset specific exposures, such as investments held as liquidity reserves, without incurring a loss because of inadequate market depth or market disruptions. One of the three primary… … Financial and business terms
prudential liquidity risk — See liquidity contingency risk … Financial and business terms
stand-by liquidity risk — See liquidity contingency risk … Financial and business terms
Economic Affairs — ▪ 2006 Introduction In 2005 rising U.S. deficits, tight monetary policies, and higher oil prices triggered by hurricane damage in the Gulf of Mexico were moderating influences on the world economy and on U.S. stock markets, but some other… … Universalium
