Assessing the Effectiveness of Bank Liquidity Risk Measurement Techniques

Thesis Abstract

This research project aims to assess the effectiveness of bank liquidity risk measurement techniques. Liquidity risk refers to the potential inability of a bank to meet its obligations as they come due without incurring unacceptable losses. Effective measurement and management of liquidity risk are crucial for maintaining financial stability and ensuring the smooth functioning of the banking system. This study will evaluate different liquidity risk measurement techniques employed by banks, such as liquidity coverage ratio, net stable funding ratio, and stress testing. It will analyze the strengths and weaknesses of these techniques and assess their ability to capture and quantify liquidity risk accurately. The findings of this research will provide insights into the effectiveness of liquidity risk measurement techniques and contribute to the enhancement of liquidity risk management practices in banks.