Liquidity Risk Management after the Crisis

2010 ◽  
Author(s):  
Sumit Mathur ◽  
Jimmy Skoglund
Keyword(s):  
Risk Management ◽  
Liquidity Risk

Does the deposit structure affect Islamic bank’s maturity transformation activities? The implications of IFSB liquidity guidelines

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Wassim Ben Ayed ◽  
Rim Ammar Lamouchi ◽  
Suha M. Alawi
Keyword(s):  
Risk Management ◽  
Positive Impact ◽  
Generalized Method Of Moments ◽  
Banking System ◽  
Liquidity Risk ◽  
Profit Sharing ◽  
Arab Countries ◽  
Mena Region ◽  
Content Type ◽  
Deposit Structure

Purpose The purpose of this study is to investigate factors influencing the net stable funding ratio (NSFR) in the Islamic banking system. More specifically, the authors analyze the impact of the deposit structure on the liquidity ratio using the two-step generalized method of moments approach during the 2000–2014 period. Design/methodology/approach Based on IFSB-12 and the GN-6, the authors calculated the NSFR for 35 Islamic banks operating in the Middle East and North Africa (MENA) region. Findings The findings of this study show the following: first, ratio of profit-sharing investment accounts have a positive impact on the NSFR, while ratio of non profit-sharing investment accounts increase the maturity transformation risk; second, the results highlight that asset risk, bank capital and the business cycle have a positive impact on the liquidity ratio, while the returns on assets, bank size and market concentration have a negative impact; and third, these results support the IFSB’s efforts in developing guidelines for modifying the NSFR to enhance the liquidity risk management of institutions offering Islamic financial services. Research limitations/implications The most prominent limitation of this research is the availability of data. Practical implications These results will be useful for authorities and policy makers seeking to clarify the implications of adopting the liquidity requirement for banking behavior. Originality/value This study contributes to the knowledge in this area by improving our understanding of liquidity risk management during liquidity stress periods. It analyzes the modified NSFR that was adopted by the IFSB. Besides, this study fills a gap in the literature. Previous studies have used the conventional ratios to determinate the main factors of the maturity transformation risk in a full-fledged Islamic bank based on an early version of NSFR. Finally, most studies focus on the NSFR as proposed by the Basel Committee, whereas the authors investigate the case of the dual-banking system in the emerging economies of seven Arab countries in the MENA region.

CCPs: A Challenge for Practical Oversight

2016 ◽  
pp. 250-271
Author(s):  
Anna Pliquett
Keyword(s):  
Risk Management ◽  
Historical Development ◽  
Liquidity Risk ◽  
Risk Profile ◽  
Counterparty Risk ◽  
Regulatory Oversight ◽  
Legal Risk ◽  
Full Picture ◽  
Main Factors ◽  
Insight Into

As a first step a short summary of the historical development of CCPs is provided, followed by an outline of the concept and core functions CCPs. Then an illustration of the main risk management safeguards of CCPs is provided. This includes an excursus regarding the hier-archical structure of clearing and regarding procyclical considerations with respect to CCPs. The outline of CCP counterparty risk management is complemented by a brief overview of other risks, including liquidity risk, legal risk, and operational risk. The consideration of the risk profile of CCPs is concluded with some insight into the main factors determining the oversight of CCPs' governance. The full picture of CCPs from an oversight perspective is given by placing the CCPs in the clearing process and the outlining the resulting challenges for regulatory oversight. The chapter concludes with a description of the manifold layers of today's oversight of CCPs.

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