20th Annual Liquidity Management

At the start of COVID-19, central banks and governments took action to help mitigate the impact, which of course challenged the banking industry’s ability to manage and report their liquidity positions. During the outbreak, the industry saw large amounts of volatility and a change in consumer behaviour resulting in banks having to manage both high liquidity demands and, independent from that, an excess of liquidity in deposits. At times of stress, the problem is often that banks hold too much or too little liquidity, so banks need to consider how they should be governing liquidity to maintain the optimal level and in turn to fulfil LCR obligations and funding demands. Banks will need to understand what the LCR requirements and intraday demands during this period through multiple stress testing of various COVID-19 scenarios as well as a re-evaluation of the liquidity risk appetite. Ideally, thorough scenario analysis will allow banks to forecast their LCR and better understand consumer behaviour in the banking and trading book and in turn understand the risk they hold and better manage their liquidity plans. With this in mind, this marcus evans conference will examine responses to liquidity management throughout COVID-19 and establish funding plans that help to meet short and long term liquidity demands.