Basic Finance Courses

Effective Liquidiy Risk Management Course

This interactive workshop course is apt for participants already engaged in or in support of liquidity risk management, either within a given enterprise or from the outside. It builds an invaluable case for addressing liquidity risk, something which was taken “for granted” especially in the financial marketplace for a long time until the arrival of the global financial crisis. Taking into account increasing business complexities, the advancement of technologies in fund flow measurement/payment processes, this is a timely workshop to keep abreast of latest market happenings and risk management techniques in addressing liquidity riskOverview.

Overview

Liquidity Risk was taken as a non-event prior the crisis but since then, assumed front seat in the risk management space. The UK Turner Review (Mar 2009) sets the tone for the need to manage liquidity risk in the banking world. The crisis also brings forth the importance of liquidity (both market and cash flow) for the non financial institution. This one-day orientation workshop initiates and fortifies the finance and audit professional, from both financial and non financial institutions, in the fundamental issues and challenges in liquidity risk management. Set against the backdrop of the global financial crisis and continual liquidity squeezes/traps and taking into account the evolving demands from Basel III and other regulatory challenges and industry best practices, the interactive session serves a timely catch-up on the subject that plagues every corporation and enables the participant to pick up useful know-how in cash flow and market liquidity management. Intended to be edu-training, it addresses the liquidity risk management practice with less quan-toxication, more qualitative rationalization and uses a palatable lay and case-based approach to an otherwise heavily technical subject

Upon completion of course, participants will be able to:

  • have a proper understanding of the different forms of liquidity risks
  • appreciate the impact liquidity risks have on financial and non financial corporations
  • develop sound principles in measuring and managing liquidity risk drawing guidance from, interalia, BIS, FSA and MAS
  • recognize the challenges posed in the process of managing liquidity risks
  • draw lessons from the Global Financial Crisis (GFC) including the Asset Backed Commercial Paper (ABCP) shutdown and the “buck-breaking” episode in the US funds world

Who should attend

All individuals who play a role in managing liquidity risk. These include

  • those serving on the board of directors
  • senior executive roles such as CEOs, CFOs, controllers, treasury managers and chief audit executives
  • other corporate executives and officers supporting the liquidity risk management machinery in the organization
  • technological and other external vendors supporting the liquidity risk management function

Methodology

Non-theoretical methodology which includes interactive discussions, case studies, interactive games and assignments to understand the concepts and their applicability.

Trainer

All our trainers are carefully chosen by us and possess a rich and vast experience in the financial sector. This course will be conducted by a renowned consultant having more than 35 years of experience in financial markets and training. Until recently, he served for many years as the Regional Director Singapore chapter and Global Board of the Professional Risk Managers International Association.

Module – 1: The 5 Ws of Risk Management

  • What is Risk Management?
  • Why Risk Management?
  • When is Risk Management required?
  • Where is Risk Management conducted?
  • Who are involved in Risk Management?
  • Exploring the Liquidity Word Cloud – what liquidity risk management entails
  • Addressing the different forms of Liquidity Risk
  • Why Liquidity = Lifeblood?
  • What drives Liquidity Risk?
  • What managing liquidity is NOT?

Module – 2: Corporate Liquidity Management and the inter-connectivity with those in financial institutions and Digital Disruption

  • What’s in Corporate Liquidity Management?
  • The Treasury and Corporate Liquidity
  • The new Liquidity Landscape – challenges and opportunities
  • Digital Transformation and Liquidity Risk Management – Virtual Ledgers and Artificial Intelligence
  • Forms of Liquidity and the optimal level of Cash
  • Corporate Liquidity and Banks – forming an interacted eco-system

Module – 3: Liquidity – the GFC Awakening

  • Reflections from the GFC – whatever happened at Northern Rock, Lehman, Merrill, Bear Stearns, securitization, CP drought.
  • At Ground Zero of the GFC – the Silent Mover called Repo
  • Lessons for all – banks, supervisors and corporate
  • The Liquidity framework under Basel
  • Bail-Ins and a Look of re-hypothecation

Module –4: Sound Practices of Liquidity Risk Management – Guidance from the regulators and industry bodies

  • Liquidity Management – science or art
  • Ingredients of a sound Liquidity Risk Management Framework
  • The Musts in Funding Risk Management
  • The 7 sins – shortcomings in liquidity risk management
  • Addressing intra-day liquidity risk management
  • Risk appetite, early warning indicators and managing collateral

Module – 5: Liquidity Metrics – Numbers that tell and don’t-tell

  • From a Pillar to 2 Ratios – Basel instructs on liquidity risk measurement
  • the workings of Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR)
  • Other liquidity risk measures
  • How much liquidity is enough?
  • Liquidity Adjusted Value at Risk

Module – 6: Contingency Funding Plan and Challenges in Liquidity Stress Testing

  • Beyond Business As Usual (BAU)
  • Addressing a bank’s worse nightmare
  • The importance and elements in Liquidity stress testing
  • Inside the Contingency Funding Plan

If you want to know more about the program, please refer to our course page at Riverstone Training schedule!

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