Large Bank Examination Workshop February 2026

Liquidity vs. Liquidity Risk (con’t) • Liquidity risk is the risk to an institution’s financial condition or safety and soundness arising from its inability (whether real or perceived) to meet its contractual obligations

Source: Trading and Capital-Markets Activities Manual - Liquidity Risk Section 3005

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Financial Institution’s Balance Sheet - $1,000,000

Assets

Liabilities

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© Global Financial Markets Institute Inc.

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