Banking Exam Question - What is Liquidity Risk? What is Risk Management & Strategies for Risk Management in Banks? Explain

Introduction - Liquidity Risk in Banks

Liquidity chance is the risk that an organization or bank might be not able meet here and now budgetary requests. This ordinarily happens because of the failure to change over a security or hard resource for money without lost capital or potentially salary all the while.

Liquidity risk happens when an individual speculator, business or money related establishment can't meet here and now obligation commitments. The financial specialist or element might be not able change over an advantage into money without surrendering capital and additionally salary because of an absence of purchasers or a wasteful market. Liquidity chance is a money related hazard that for a specific timeframe a given monetary resource, security or ware can't be exchanged rapidly enough in the market without affecting the market cost.