Bank Analysis School - September 2023

Internal Use Only

What is Liquidity? Ability to meet cash needs (expected and unexpected) at a reasonable cost What are a bank’s cash needs?

How does a bank meet cash needs?

Assessing a bank’s liquidity position starts with understanding their balance sheet

Internal Use Only

New Deposits or Borrowings

Payments/Maturities of Loans and Securities Sale of Liquid Assets

Deposit Runoff

Asset Growth (loans, purchase securities) Desire (or need) to Payoff Borrowings