• Service: Advisory, Risk Consulting, Financial Risk Management, Topics, Managing Risk & Complexity, Risk Systems for Financial Services, Financial Services Regulation
  • Industry: Financial Services, Banking
  • Type: White paper
  • Date: 4/06/2012

Liquidity: A bigger challenge than capital 

A major issue during the crisis was banks being unable to roll over short-term financing. Investor confidence plummeted, leading to a liquidity squeeze within some financial institutions. In response the Basel Committee on Banking Supervision (Basel Committee) introduced two new liquidity ratios for banks. The Basel Committee aims to strengthen banks against adverse shocks; eliminate structural mismatches; and encourage more stable sources of funding.
Liquidity: A bigger challenge than capital cover
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The paper is particularly relevant for Australian banking institutions and our regulatory environment as it provides valuable information to ADIs preparing for APRA's final Prudential Standard on Liquidity (APS 210).


Key topics covered include:

  • The Basel 3 liquidity proposals and implementation timetable
  • The strategic and operational issues as a result of the ratios
  • Key actions banks are taking in response
  • The impact on banks that aren't able to meet the ratios
  • How the liquidity ratios are currently being implemented.

The report also contains an illustrative example of the impacts of the new liquidity requirements on a bank's balance sheet.


Financial services regulation

Financial services regulatory change
Regulation can involve change and complexity, however many organisations use regulatory to underpin business transformation and drive change.

Risk, trading and treasury systems in financial services

Financial services institutions are seeking new approaches to managing the increasing demands on their risk, trading and treasury systems.


KPMG’s Banking practice in Australia is well placed to help clients successfully navigate challenging times and capitalise on opportunities.