Includes bibliographical references (p. [267]-270) and index.

1 Liquidity and Risk: Some Basics. 1.1 Some understanding of liquidity. 1.2 The meaning of liquidity risk. 2 Liquidity in the Context of Business and Financial Policy. 2.1 Introduction. 2.2 Equilibrium as a tool within financial policy. 2.3 The concept enlarged to fit banks. 3 Liquidity as an Element of Banking Risk. 3.1 Some clarifications. 3.2 The concept of downside risk (VAR) and its circle of relationships. 3.3 LAR: liquidity risk and the missing theoretical concept. 3.4 An attempt at an integrated concept for LAR. 3.5 Summary. 4 A Policy Framework for Liquidity. 4.1 Some thoughts and considerations. 4.2 An overview of elements regarding liquidity policy. 4.3 The elements of a liquidity policy in detail. 4.4 Contingency planning. 4.5 A technical framework supporting liquidity policy. 4.6 The link to liquidity management. 5 Conceptual Considerations on Liquidity Management. 5.1 Introduction. 5.2 From accounting presentation to defining the liquidity balance sheet. 5.3 The liquidity balance sheet and liquidity flows. 6 Quantitative Aspects of Liquidity Management. 6.1 General consideration. 6.2 Liquidity at risk as one determinant of the buffers. 6.3 Defining and quantifying the buffers. 6.4 Limit-related input for liquidity policy. 6.5 Transfer pricing and an alternative concept. 7 The Concept in Practice. 7.1 Introduction. 7.2 Establishing the base. 7.3 Case 1: a shock event (9/11). 7.4 Case 2: a name-related stress (Commerzbank in autumn 2002). 7.5 'Subprime' crisis: a stress in progress. 7.6 Final remarks and considerations. 8 Acting Within the Supervisory Frame. 8.1 High-level risks. 8.2 The regulatory focus set by supervisors. 8.3 Considerations and conclusions for bank management.