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Stress testing / Liquidity and funding risk [46]

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Bullet points include: When responding to 2007-2009 Credit Crisis banks found it difficult to modify new business volumes E.g. major UK banking group with extensive commercial real estate lending adjusted its pricing upwards, but new lending volumes continued to grow as other lenders left the market Eventually had to reduce approval volumes dramatically and withdraw from marketing activity Wide range of apparently high quality marketable assets (structured products and bonds) became distressed and banks could only sell them by incurring major losses

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