Chapter_11_Liquidity - Savings CD< 100K CD> 100K •...

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Chapter 8 - Liquidity LIQUIDITY – Having sufficient funding flexibility for maturing liabilities without having an adverse impact on profitability. LIQUIDITY NEEDS – Meet Cash Letters Withdraws Daily Operations Reserve Requirement Funding Loans ASSET LIQUIDITY – Ability to convert assets into cash without incurring significant losses Market pricing, incurs transaction costs Cash, cash in transit Due From Banks /with interest Federal Funds Sold/Repo Agreements Investment Securities Loans LIABILITY LIQUIDITY – Ability to borrow funds and meet short-term obligations Requires market access, incurs debt servicing and transaction costs Deposits DDA NOW Core Deposits
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Unformatted text preview: Savings CD < 100K CD > 100K • Federal Funds Purchase/Repo • FHLB • FRB Discount Window • Other Borrowings (HC, affiliates, etc.) • Debentures • TPS CAPITAL LIQUIDITY – Ability to generate cash via equity instruments Stock sales, exercising stock options, TPS INCOME LIQUIDITY – Ability to raise funds through operating cash flow Dividend assessment LIQUIDITY POSITIONS (Assets : Liability) 0-7 DAYS; 8-30 DAYS; 31-90 DAYS… LIQUIDITY POLICY Asset/Liab Committee Responsibilities Members Paramenters/guidelines Total loans/total deposits < 95% Liquidity assets/total assets >15% Max % brokered deposits Non core funding dependent ratio...
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