Capital Markets Examiner School, Providence, RI

Liquidity Events

Probability

Low Probability,  High Impact  Events

Liquidity  Impact

High Probability,  Low Impact  Events

Liquidity Events

High Probability, Low impact  Daily liquidity position movements  Routine deposit fluctuations  Seasonality of Public Funds  Tax Deposits  Typical funding of off-balance sheet items  Measured through base case Cash Flow analysis

Low Probability, High Impact  Significant impact on the liquidity position  Idiosyncratic and Systemic  Measured through Liquidity Stress Testing (LST)  Managed through the Contingency Funding Plan (CFP)