Given recent stresses in the global financial system and the
associated high-profile bank failures, there has understandably been
much attention focused on bank liquidity.
While this attention is clearly justified, the significant work to address
issues surrounding prudential liquidity provisioning on foot since the
global financial crisis of 2007/2008 should not be overlooked.
In this Law360 article, we examine some of the prudential liquidity
reforms implemented following the global financial crisis and the
current status of the ongoing regulatory review in the UK.
We will also look at how, while the purpose of these measures is to
ensure that banks create a "rainy day" fund to tap into in times of
emergency, deploying these funds in times of stress is possibly easier
said than done.
Read the article here.