June 23, 2009 09:08 ET

Regulators Will Demand That Financial Institutions Manage Liquidity Risk

ROCKVILLE, MD--(Marketwire - June 23, 2009) - has announced the addition of TowerGroup's new report "Liquidity Risk Management: The Next Global Battleground in the Financial Services Industry," to their collection of Banking & Financial Services market reports. For more information, visit

Regulators will demand that financial services institutions (FSIs) include managing liquidity risk as a cornerstone of integrated risk management as global financial systems recover.

Intrusive oversight of liquidity risk management by regulators will constrain profitability, limit scalability of business, stifle financial innovation, and retard global economic recovery.

Financial institutions will be forced to seek and make extensive use of new technologies for liquidity risk management in response to regulatory demands. Real-time tracking of market sentiment toward market and funding liquidity will offer vendors significant opportunities to leverage emerging and improved technologies.

Absent new investments in technology, regulators will encounter significant challenges in meeting the demands of continual oversight of liquidity risk management.

As mark-to-market rules become less stringent, regulators and FSIs should refrain from reclassifying illiquid assets as good assets to prevent more severe long-term consequences.

Topics covered in the report include...
Report Coverage
Principles of Liquidity Risk Management
Sources of Liquidity and Their Risks
The Potential for Public/Private Collaboration on Technology

For more information visit

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