BAS September 2022 Presentations

What is Liquidity? Ability to meet cash needs (expected and unexpected) at a reasonable cost What are a bank’s cash needs?

Funding loans Deposit runoff Paying off borrowings

How does a bank meet cash needs? Operating Cash Flows On-Balance Sheet Liquid Assets Off-Balance Sheet Sources (borrowings)

Assessing a bank’s liquidity position starts with understanding their balance sheet

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New Deposits or Borrowings

Payments/Maturities of Loans and Securities Sale of Liquid Assets

Deposit Runoff

Asset Growth (loans, purchase securities) Desire (or need) to Payoff Borrowings

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