Prudential Liquidity Regulation in Developing Countries

Prudential Liquidity Regulation in Developing Countries

4.11 - 1251 ratings - Source

This paper analyses the prudential liquidity management framework, in particular the quantitative indicators employed by the central bank of Rwanda in response to the domestic liquidity crisis in 2008/09. It emphasises that the quantitative methods used in the monitoring and assessment of systemic liquidity risk are inadequate because they did not signal the liquidity crises ex-post. There are quick gains to be made from augumenting the liquidity risk indicators with more dynamic liquidity stress tests so that compliance will be achieved through lengthening the maturities of both assets and liabilities on the balance sheet as opposed to simply holding more liquid assets. The paper recommends that policy emphasis shift toward reforms that strengthen systemic liquidity risk assesment, monetary policy implementation as well as improve the efficiency of Rwanda''s financial system.A Case Study of Rwanda International Monetary Fund ... Management in the U.A.E.: Issues and Options, IMF Working Papers 09/261, Washington DC, International Monetary Fund Cihak, M., ... L., and Neu, P., (2007), Liquidity Risk Measurement and Management: A Practitionera#39;s Guide to Global Best Practice, Singapore, anbsp;...

Title:Prudential Liquidity Regulation in Developing Countries
Author:International Monetary Fund
Publisher:International Monetary Fund - 2012-01-01


You Must CONTINUE and create a free account to access unlimited downloads & streaming