Question

4) Any suggestions/improvements you could make for managing liquidity risk in Commonwealth Bank?

Answer 1

STEPS FOR MANAGING RISKS IN COMMONWEALTH BANKS -

1) Banks should performs regular stress tests and scenario analyses which covers adverse and severe operating conditions. This allows a better understanding of the liquidity and market risks to enable proactive risk based decisions.

2) The Bank should maintains a diverse and stable pool of potential funding sources across different currencies, geographies, entities and products.

3) Banks should limit the amount of short-term wholesale funding sourced from offshore and maintains sufficient liquidity buffers and short-term funding capacity to withstand periods of disruption in long-term wholesale funding markets.

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