Liquidity lessons learned a decade after the financial crisis
“Wow, I can’t believe I can say that the financial crisis was a decade ago,” said Chris Mills, Managing Director of Model Validation Services for MountainView, a Situs company, during Wednesday’s liquidity risk webinar. “It doesn’t feel like a decade.”
Time flies when you are trying to emerge from a global financial crisis. Now, 10 years later, financial industry executives are assessing whether their financial risk management strategies will enable them to meet ongoing cash and collateral obligations if another crisis, or liquidity event, occurs. Indeed, since the crisis, regulators identified that ineffective liquidity risk management was a key contributor to the crisis.
Mills, a seasoned executive banker and balance sheet strategist, made it clear in the webinar that predicting the next downturn is not nearly as important as preparing your institution for the next downturn. “The industry was ill-prepared for an extreme systemic crisis,” said Mills. “We just didn’t have the proper plans in place, and stress testing was not a mainstream.”
With that in mind, Mills asked the audience to consider…
