Reserve Bank of New Zealand’s Post

I found this speech particularly insightful. It offers valuable lessons from recent events in #banking crises and resolutions. I especially liked the comparison of the US approach with the EU, and the point that financial authorities must respond to each situation with an individual approach. In the case of last year’s US bank failures, the rapid liquidity drop-off highlighted how critical #intraday #liquidity #management is in today’s banking landscape. For #bank #managers, it is essential to understand that preventing crises through sound asset-liability management (#ALM) and strong balance sheet management is far more effective and less costly than going through resolution 🙂. A proactive approach to risk management is crucial for ensuring long-term stability and avoiding potential pitfalls. #Banking #ALM #RiskManagement #FinancialStability #BankManagement #bankingindustry

Financial Stability Institute Chair Fernando Restoy recently spoke on financial crisis management and shared lessons for the European bank resolution framework. The 2023 banking crises in the United States and Switzerland tested those countries’ post- Great Financial Crisis resolution frameworks. While actions taken preserved financial stability, they deviated from standard procedures and required external support, highlighting areas for improvement. Restoy explained that there are strong reasons to extend resolution planning obligations to all banks whose failure could have adverse effects on the financial system. Crucially, resolution plans should include well defined requirements for a minimum amount of loss-absorbing liabilities in resolution. Those requirements should be calibrated to directly support the feasibility of the envisaged resolution strategy and ideally be composed primarily of debt instruments rather than equity as the latter might well largely disappear before resolution is triggered. In addition, Restoy maintained that planned resolution strategies should be more an array of options for deploying different tools than a rigid playbook. Importantly, experience shows that it is wise to put in place well defined procedures for the delivery of extraordinary external support in extreme circumstances. According to Restoy, the EU now has a great opportunity to address the deficiencies identified in the current bank crisis management framework, particularly with regard to the failure of mid-sized banks. The European Commission’s crisis management and deposit insurance (CMDI) legislative proposal is a highly valuable and internally consistent initiative whose spirit and main features should be preserved in the ongoing political negotiations. https://lnkd.in/ey8FA-v4 #FinancialStabilityInstitute #BankingReform #CrisisManagement #BankResolution

Short-term and long-term planning for an emergency fund ensure immediate access to cash for urgent needs and sustained financial security. Short-term planning offers liquidity and a buffer against financial shocks, while long-term planning focuses on growth and comprehensive risk management. With the guidance of a financial advisor, you can ensure the best strategies for stability and protection against a wide range of emergencies. #EmergencyFund

Discover how superannuation funds can better manage costs, increase efficiency, improve risk management and compliance and more by upgrading legacy models with modern technology and digital capabilities. https://ow.ly/oJAZ30sF8b0

Discover how superannuation funds can better manage costs, increase efficiency, improve risk management and compliance and more by upgrading legacy models with modern technology and digital capabilities. https://lnkd.in/e5nHXFSa

Discover how superannuation funds can better manage costs, increase efficiency, improve risk management and compliance and more by upgrading legacy models with modern technology and digital capabilities. https://ow.ly/TXyf30sF9AU

Banking risk and investment: I was offering to write an article for the ACT on bank risk takers, driven by greed, and corporates bank risk management. I recommend to you instead John Plender’s 2 pager on investment in this Weekend FT. Covers all bases and far more.

Before you start pulling money out of your business to build your portfolio, let's take a step back and discuss a crucial aspect of risk management in business: The Emergency Fund 💼💡 An emergency fund provides liquidity, reduces stress, and allows you to take calculated risks without fearing financial instability. (Check out our video to learn more! 🎥) Mismanagement of cash flow is the single biggest reason for business failure—not a lack of adequate marketing. This is why understanding and building an emergency fund into your business is essential if you have big plans to outlast your competitors. Failing to have an emergency fund can leave you vulnerable to financial shocks, potentially jeopardising your business. On the other hand, a well-funded emergency reserve can give you peace of mind and the stability needed to navigate through market volatility and unforeseen challenges. 😌🔒 By establishing a robust emergency fund, you're not only safeguarding your business but also positioning yourself to seize new opportunities without hesitation. 🌟🧠 So, how much should you save? As a general rule of thumb, aim for a minimum of 3 months' worth of cash to cover your operating expenses. This ensures you have a financial cushion to weather any storms that come your way. Remember, a solid emergency fund is your first line of defence in maintaining business continuity and achieving long-term success. 🏆 How's your emergency fund looking? #cashflow #riskmanagement #emergencyfund #cash #money #wealth #portfolio #business #smallbusiness #cashflowmanagement #businessowner #safetynet #financialplanning #businessgrowth #smallbusinesstips #smallbusinessgrowth #hya #hyaccounting #growthhubconsulting

As 2024 gets moving, the Living Debt Free team is taking some common business practices and applying it to your personal finances to support you in becoming #FinanciallyFit #11: Risk Management (Part 2) We’ve already discussed identifying Risk identification in our previous posts so today we’re discussing Risk Mitigation. One of the easiest ways to mitigate financial risk is to start an emergency savings account. Work towards setting aside a minimum of 3 months expense costs into that account so that if things don’t work out as planned you will have enough money to budget for the unexpected while you get back on your feet. Find out more about Living Debt Free by visiting our website. https://smpl.is/8rzrs

The PRA has published a "Dear CRO" letter and a speech on the PRA's thematic review into UK banks' management of risks arising from their private equity related financing business. Greg King, Jay Sarker and I took a look at the points raised by the PRA and the follow-up actions for UK banks' risks teams. #banks #privatecapital #privateequity #CRO #riskmanagement #financialregulation https://lnkd.in/eNtGpUeG