Capital Markets School

Internal Use Only

Examples of Liquidity Stress Events Idiosyncratic • AQ deterioration • Consistent operating losses • Rising reputational risk • Inability to access funding lines • Credit rating downgrade • PCA downgrade • Deposit run/rapid redemption of time deposits • Collateral requirement changes Systemic • Funding markets cease to function • Bond market fluctuations • Inability to sell/securitize assets • Negative news • Credit rating downgrade • Significant funding vehicles cost changes

Internal Use Only

Complex

Moderate Complexity

Non Complex

Community Banks

$10B TA

Large Financial Institutions

Mid-Sized Banks

$1B TA