Liquidity Risk: Identification
Interactive

Liquidity Risk: Identification

Intuition Publishing
Updated Aug 26, 2020

Liquidity is essential to all banking institutions – without access to cash, banks are unable to lend and cannot settle bills as they fall due. Liquidity risk arises where bank assets and liabilities are mismatched in terms of maturities. Here we look at how such mismatches arise in a bank's borrowing, lending, and trading activities.