EXAM - possible questions from Ch. 11 include three liquidity management strategies; liquidity indicators definitions and relationship with liquidity;  computation of reserve requirements;  how to compute balance required to compensate for correspondent services for a given fee amount and interest rate; and potential foreign currency liquidity management problems.  See lecture notes in file below.

See recent articles on Liquidity Coverage Ratio Requirements and Net Stable Funding Ratio below and know what the ratios are.  Another earlier article (01/07/13) illustrates some of the assumptions about withdrawals and loan demand in an earlier proposal.

Print page 8 (this is equivalent to p. 10 on pdf version) of the assigned SunTrust Banks, Inc. Performance Report (see file below) and bring to class. You should also bring the information for you class project BHC because you will have to evaluate similar information and the discussion should be useful to you.  We will examine a liquidity measure (short-term investments/short-term noncore funding). 

It will not be covered in class or on the exam but for a more in-depth discussion of setting regulatory policies for liquidity see a speech by FED Governor Jeremy C. Stein, at the "Finding the Right Balance" 2013 Credit Markets Symposium sponsored by the Federal Reserve Bank of Richmond, Charlotte, North Carolina, April 19, 2013,  on "Liquidity Regulation and Central Banking" at http://www.federalreserve.gov/newsevents/speech/stein20130419a.htm.

See "Liquidity Mismatch Helps Predict Bank Failure and Distress," J.B. Cooke, Christoffer Koch and Anthony Murphy, DALLASFED Economic Letter, VOL. 10, NO. 6, MAY 2015, at http://www.dallasfed.org/assets/documents/research/eclett/2015/el1506.pdf.