The document discusses liquidity risk management. It provides historical context on liquidity issues during the financial crisis. Key points discussed include: - Traditional measures like balance sheet ratios are outdated and fail to capture risks - Guidance from 2000 would have mitigated crisis impacts had it been adopted - The 2010 interagency guidance outlines best practices for liquidity risk management, including governance, strategy, monitoring, contingency planning - Areas of focus include diversified funding, liquid assets, stress testing, and scenario planning

8. Tools To Measure Liquidity Risk Static Balance Sheet Ratios Net Non-Core Funding Dependence Large Depositors to Total Deposits Loans to Deposits Pledged / Total Securities Loans to Assets Contingency Funding Plans Cash Flow Modeling Scenario Analysis Pro Forma Cash Flows

10. Guidance issued by the basel committee on Banking Supervision (BCBS) 02/2000 Sound Practices for Managing Liquidity in Banking Organizations 1. Guidance was not translated into domestic policy. 2. Likely would have significantly mitigated the liquidity crisis seen during 2007 & 2008. 02/2008 Liquidity Risk: Management and Supervisory Challenges 09/2008 Principles for Sound Liquidity Risk Management and Supervision 1. Update to 2000 Guidance. 2. Principles served as a foundation for proposed U.S. Interagency Guidance. 12/2009 International Framework for Liquidity Risk Measurement, Standards, and Monitoring 1. Standards establish minimum levels of liquidity for internationally active banks. 2. Supervisors are free to adopt arrangements that set higher levels of minimum liquidity.

22. Contingency Funding Plan (CFP ) Identify Stress Events Assess levels of severity and timing Assess funding sources and needs Identify potential funding sources Establish liquidity event management processes Establish a monitoring framework for contingent events

23. Contingency Funding Plan Sample

30. Wholesale Funding Report Sample

37. Karl Nelson (770) 262-8446 [email_address]