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E-Learning Course: Liquidity Management and Contingency Funding Plan (Library of 14 courses)

  • Training

  • KESDEE Inc
  • ID: 2989122
Liquidity is essential in all banks to compensate for expected and unexpected Balance Sheet fluctuations and to provide funds for growth. The recent liquidity crises faced by banks and financial institutions have brought to the fore the need to review their existing Liquidity Management Policies, Practices and Procedures.

Learning Objectives:

- Understanding how to Measure, Monitor and Control Liquidity
- Performing the trade-off between costs/benefits of various Liquidity Strategies
- Comparing the liquidity challenges of retail versus wholesale institutions
- Contrasting Funding Liquidity with Trading Liquidity
- Studying the liquidity profiles of institutions with Credit Risk, Market Risk & Operational Risk
- Evaluating various Contingency Funding Plans

Target Audience:

Every professional involved in the global financial services industry (as a provider, user, regulator or advisor of product/services, marketplace/exchange) would benefit from this course.

- Supervisory Agencies
- Central Banks
- Financial Institutions
- Commercial Banks
- Investment Banks
- Housing Societies/Thrifts
- Mutual Funds
- Brokerage Houses
- Stock Exchanges
- Derivatives Exchanges
- Insurance Companies
- Multinational Corporations
- Accountancy Firms
- Consultancy Firms
- Law Firms
- Rating Agencies
- Multi-lateral Financial Institutions
- Others

Course Content

1. Role of Liquidity in ALM

This course gives an introduction to the role of liquidity in Asset Liability Management (ALM). Topics covered include:
The concept and relevance of Liquidity Management
Sound practices in liquidity management
The role of liquidity management in Asset Liability Management
The inter-relation between liquidity risks and the other risks
How to measure the quality of liquidity management
The costs and benefits of liquidity management

2. Liquidity Crises - Case studies

This course is a compilation of case studies of various financial institutions. It helps the user understand the liquidity crises in the following:
Credit Lyonnais
Barings Bank
Continental Illinois National Bank

3. Liquidity Measurement Systems -1
This course explains the use of ratio analysis as a powerful tool in liquidity management. It helps the user understand:

The application of ratios to measure the relationships between various components of a balance sheet
The analysis and measurement of liquidity ratios
The application of ratio analysis for planning an institution's activities
A Bank's on-balance sheet and off-balance sheet liquidity requirements
The comparison between the various liquidity measures

4. Liquidity Measurement Systems - 2
This course explains how cash flows are used as a tool to measure liquidity. It helps the user understand:

The effects of asset liability changes on a banks liquidity
The use of cash flows as a tool to measure liquidity gap
The impact of maturity decisions on liquidity positions of banks and other institutions
The application of statistical techniques for identification of variations in balances

5. Liquidity Measurement Systems - 3
This course gives an introduction to the various risk-based measures used by financial institutions. Topics covered include:

The application of risk based measures
The concept of liquidity conversion factor
The regulatory guidelines on risk-based measures
The various measurement strategies to manage liquidity
The relationship between business portfolio mix and liquidity management
The application of risk-based measures for liquidity

6. Practical tools and techniques
This course gives an introduction to some practical tools and techniques that banks and financial institutions use to measure and monitor liquidity. It helps the user understand:

The application of practical tools to measure and monitor liquidity
The effect of business factor on techniques through the three case studies of
Subsidiary Bank
Regional Bank
Community Bank
Private Banking

7. Liquidity Strategies - 1
This course deals with how banks and financial institutions could employ various liability strategies to reduce risks and improve liquidity. It helps the user understand the liquidity crises in the following:

The asset, liability and off-balance sheet strategies to manage liquidity
The use of FX-swap as a tool for transferring liquidity between different currencies
The practical applications of liquidity management policies
Costs and benefits of different ways of meeting liquidity
The use of asset securitization as a tool for liquidity management

8. Liquidity Strategies - 2
This course highlights the challenges faced by the top management with respect to the liquidity of an institution. It helps the user understand:

The role of top management in formulating an organization's liquidity strategy
The liquidity risks in different lines of business:
Loan Purchases and Sales
Lease Financing
Mortgage Banking
Private Banking

9. Trading Liquidity Risk -1
This course gives an introduction to how the top management of banks and financial institutions need to measure, monitor and address trading risks in their liquidity plan and management process. It helps the user understand:

The factors affecting the trading liquidity of an institution
The liquidity implications of different situations faced by an institution
The various trading instruments used by financial institutions
Forward Rate Agreements (FRAs) and their liquidity implications

10. Trading Liquidity Risk - 2
This course deals with the instruments in trading liquidity risks. It helps the user understand:

The instruments used in trading liquidity: forwards, swaps and options
The risks associated with forwards, swaps and options
The methods of hedging risks using these trading instruments
The liquidity implications of these trading instruments

11. Trading Liquidity Risk - 3
This course deals with the three trading instruments viz., Foreign Exchange, Money Market Securities and Foreign Exchange Options and their liquidity implications. It helps the user understand:

The other financial instruments used in trading liquidity, viz., foreign exchange, money market securities and foreign exchange options
The trading and funding liquidity risks associated with the above instruments
The risk warning control signs monitored by financial institutions to manage the risks

12. Trading Liquidity Risk - 4
This course explains in detail the different strategies banks can employ to manage their trading liquidity risk. It helps the user understand:

The various strategies adopted by a financial institution to manage trading liquidity risk
The precautions for managing liquidity risks
The importance of trading liquidity management through case studies of
Granite partners
Long Term Capital Management (LTCM)

13. Contingency Funding - 1
This course gives an introduction to Contingency Funding Plan. It helps the user understand:

The concept of Contingency Funding Plan (CFP) if normal business operations are affected by crises
The telltale signs of the emerging liquidity problems
The strategies adopted by financial institutions to deal with crisis situations
The six essential components of contingency funding plan
The evaluation of contingency funding plan against preset objectives
The FDICIA regulations governing liquidity management of financial institutions

14. Contingency Funding - 2
This course discusses with the aid of a Real-Life Case Study, the various components of the actual Contingency Funding Plan (CFP) of a bank. It helps the user understand:

The components of contingency funding plan
The purpose, scope and content of contingency funding plan
Funds management and liquidity monitoring process
The identification of liquidity crises and its administration