Large Bank Examination Workshop February 2026

2008 Financial Crisis • The global financial crisis primarily resulted in losses associated with:  the trading book;  off balance sheet derivatives;  market risk; and  inadequate liquidity risk management. • Banks suffered heaviest losses in their trading book • Banks did not have adequate capital to cover the losses 17

Liquidity Risk Issues • There was heavy reliance on short term wholesale funding  Repos  Contingent LOCs • Unsustainable maturity mismatch • Insufficient liquidity assets to raise finance during stressed period

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