Capital Markets School - Case Study

CONTINGENCY FUNDING TEAM In general, the Board of Directors will oversee liquidity processes managed by the Contingency Funding Team. The CFO will be responsible for monitoring the liquidity condition of the Bank and will report regularly to the CFP Team. Exhibit A identifies monitoring items, both internal and external. It shall be the responsibility of the CFP Team to assess the current and expected severity of an identified stress event and outline an appropriate Action Plan that addresses same. Over the course of the event, the CFP Team shall make regular reassessments of the event’s severity and adjust the Action Plan accordingly. As the details of a future liquidity stress event cannot be comprehensively described prior to the occurrence of the event, the Board of Directors and CFP Team believe that the development of detailed, multi-level response scenarios is unnecessary at this time. However, a general Action Plan is included in the following section. In the event of a liquidity crisis, the CFP Team will be activated and facilitate internal coordination and decision making during the crisis. The purpose will be to ensure a clear, timely, consistent and coordinated communication flow between the Bank and several key constituents – Regulators, Shareholders, Board of Directors, Clients, Local Media, and Funding Sources – in a way that maintains general confidence in the Bank. The team has been selected based on the key roles required in such an event and is comprised of the following: • President and CEO, will communicate with Regulators, Shareholders, and Clients. • Director, will communicate with the Board of Directors. • CFO, will communicate with Funding Sources and assist CEO with Regulators. • Communications Director and COO, will assist CEO with communications to Shareholders, Clients, and Local Media. • Senior Credit Officer, will assist the team with all credit issues associated with the liquidity event. The team will also be responsible for communicating with the Bank staff on a regular and consistent basis so long as the crisis continues. Additionally, it is the responsibility of the team to conduct routine, periodic testing of all established contingent funding sources to ensure operational soundness in times of crisis.

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