What is it about?

This paper is aimed at highlighting the importance of liquidity standards, corporate governance measures and internal controls within the framework of important financial measures and indicators - as drawn from some vital lessons from the GFC.

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Why is it important?

As well as the realisation that the quality and quantity of regulatory capital needed to be revised - thus heralding the introduction of buffers - and particularly conservative and counter cyclical capital buffers, liquidity standards and leverage ratios had to be introduced as a result of liquidity transformations, mismatches and short term funding problems which contributed to the level of liquidity risks - as well as excess deleveraging processes.

Perspectives

Th importance of up to date real estate prices and indices as vital financial indicators was also realised following the GFC. The importance of property price indices as financial indicators in “detecting and monitoring” asset price bubbles – whilst serving to support the measurement of non financial assets in sectoral accounts, was highlighted in the progress report on the implementation of the G20 Data Gaps Initiative See “The Financial Crisis and Information Gaps: Sixth Progress Report on the Implementation of the G-20 Data Gaps Initiative”, Prepared by the Staff of the IMF and the FSB Secretariat September 2015 Pages 39 and 40

Prof Marianne Ojo
Northwestern University

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This page is a summary of: International Framework for Liquidity Risk Measurement, Standards and Monitoring: Corporate Governance and Internal Controls, SSRN Electronic Journal, January 2016, Elsevier,
DOI: 10.2139/ssrn.1584402.
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