Details

  • Industry: Financial Services
  • Type: Business and industry issue
  • Date: 2012/06/13

Liquidity – A bigger challenge than capital 

A major issue during the financial crisis was the inability of banks to roll over short-term wholesale financing. Investor confidence plummeted, leading to a liquidity squeeze within some financial institutions. In response, the Basel Committee on Banking Supervision has introduced two new liquidity ratios for banks. These liquidity ratios are aimed at strengthening banks against adverse shocks, eliminating structural mismatches and encouraging more stable sources of funding.
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A bigger challenge than capital…


Liquidity – A bigger challenge than capital explores the key challenges for global banks arising from the new liquidity ratios, including:


  • 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 across the European Union, the US and Asia Pacific.


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

Contact

Contact
Trevor Hoole
Clients & Sectors Head: Financial Services
Tel: +27 (0)11 647 7276
trevor.hoole@kpmg.co.za

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