Certificate Course in Liquidity Risk Management (CCLRM)

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Duration: 60 Days

Fees: US$70

Video Lectures

Presentations & Reading Materials

Multiple Choice Question Answers

Case studies

Certificate Course

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A bank faces a number of risks: credit risk, market risk, and operational risk, but liquidity risk stands apart as it addresses the lifeblood of an institution. Liquidity can dry up suddenly if not properly managed. While the credit profile of a loan portfolio can take months or even years to deteriorate, liquidity can disappear in a matter of hours and is unpredictable, difficult to measure, and often opaque.

Liquidity risk management is a core competency area for all types of financial institutions. In the aftermath of various crisis that hit banks, liquidity risk management practices have continued to evolve, and the regulatory guidance continues to raise the standards on what are considered “strong” capabilities.

Managing risks is all about understanding how to reduce a complex business environment to workable concepts and models. CARE Advisory Research and Training course on liquidity risk management provides the tools for dealing with liquidity risk.

The online course on Liquidity Risk Management offer a practical guide to the industry practices and regulatory issues. This course on Liquidity Risk Management is divided in eight parts.

  1. Introduction and concepts of liquidity risk. It covers various aspects of liquidity risks, the causes of liquidity risks and how these risks manifest themselves in the real world.
  2. Fundamental principles of managing funding liquidity risk and market liquidity risk.
  3. The governance framework for management of liquidity risk, the role of board of directors, risk management committee, asset-liability management committee, and the ALM support group.
  4. The best practices in defining liquidity risk tolerance, liquidity risk management policy, strategies and practices, and identification of liquidity risk.
  5. The measurement of liquidity risk. In this part we cover traditional measures of liquidity risk measurement as well as various liquidity ratios prescribed by the RBI. We also discuss, with examples, liquidity adjusted VAR and Liquidity at risk.
  6. Monitoring of liquidity risk through preparation of Structural Liquidity Statements, Short-Term Dynamic Liquidity Statements, and creating Maturity Ladder Under Various Scenarios.
  7. Asset-liability management. In this part we discuss the objectives of ALM, its elements, namely ALM organisation structure, ALM information system and ALM processes.

Throughout the course relevant reading material and case studies for practice have been made available online. Towards the end, the participants are assessed by an examination that comprises of multiple-choice questions.