Quantification and Attribution

Funding and Liquidity Risk Management

Quantification and Attribution

OMB: 1557-0244

Document [doc]
Download: doc | pdf

14. Institutions should consider liquidity costs, benefits, and risks in strategic planning and budgeting processes. Significant business activities should be evaluated for both liquidity risk exposure and profitability. More complex and sophisticated institutions should incorporate liquidity costs, benefits, and risks in the internal product pricing, performance measurement, and new product approval process for all material business lines, products, and activities. Incorporating the cost of liquidity into these functions should align the risk-taking incentives of individual business lines with the liquidity risk exposure their activities create for the institution as a whole. The quantification and attribution of liquidity risks should be explicit and transparent at the line management level and should include consideration of how liquidity would be affected under stressed conditions.


File Typeapplication/msword
AuthorOCC
Last Modified ByOCC
File Modified2010-03-22
File Created2010-03-22

© 2024 OMB.report | Privacy Policy