| The Liquidity Risk SweepstakesRegulators have sought to address credit risk through mandatory clearing requirements and the expanded use of collateral, but what happens during "liquidity black holes"? |
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| Liquidity: The End of a Golden AgeIn the wake of the credit crisis, liquidity risk management at banks has undergone a significant transformation as new have ushered in a dramatically different era. |
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| The New Risk RealitiesThe Dodd-Frank Act and Basel III will significantly expand regulatory requirements and transform financial institutions' approach to risk management. |
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| A Changing Risk LandscapeThe “black swan” that occurred in financial markets between 2008 and 2009 has highlighted weaknesses in the risk management practices across every financial sector and has triggered a re-thinking of the way we approach risk management problems. |
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| New WaveIlliquidity, or the inability to meet obligations coming due, has long been a known hazard in financial operations. It just didn’t get the attention it deserved -- until the financial crisis hit. If, as has been said, interest rate risk is like a gun pointed at your wallet, then liquidity risk is a gun pointed at your head. |
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| Modeling the Sources of Liquidity RiskThe credit crisis that began in 2008 coincided with a paralysis of many markets. The liquidity draught started with the subprime and collateralized issues, and successively infected the inter-bank deposits market and the bond markets. |
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| New Calculus in Investment StrategyStill reeling from the market collapse last year, many institutional investors are taking a harder and different look at their risk management, industry observers say. The function is in ascendancy, and so is the level of specialization and sophistication, notes Bud Haslett, head of risk management, derivatives and alternative investments for the CFA Institute. |
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| Tradition Meets GlobalizationSubprime lending. Structured products. Derivatives. Such innovations, seeds of recent destruction in global financial markets, have posed daunting regulatory challenges in the Western money centers where they originated. But in the Muslim world governed by Sharia law there is no provision at all for such complex and potentially toxic assets. |
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| Grasping at ShadowsVirtually every transaction and agreement undertaken by an institution has implications on its liquidity. While the importance of managing liquidity risk was known prior to the credit crisis, it was based on the assumption that cash flow was readily available at all times -- in unlimited volumes and at an insignificant cost. |
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