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Liquidity Risk - Relevance to Actuaries [4]

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Bullet points include: Very much in the public eye. Proximate cause of many of the problems in the 2007-09 credit crisis. Firms unable to offload illiquid (‘toxic’) assets to meet funding requirements. E.g. Northern Rock and Bradford and Bingley business models predicated on ready access to funding whenever needed from wholesale money markets. Business models collapsed when these markets effectively shut down. US investment banks converted to commercial banking status to be able to access government liquidity assistance arrangements

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