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ST-2.3.4

The following are examples of stress scenarios relating to liquidity risk:

(a) Tightening of credit lines — the potential impact of liquidity stress on the solvency position arising from a higher cost of funding due to tightening of wholesale and deposit/funding markets, and loss in the value of marketable securities due to market illiquidity;
(b) Funding concentration — this assesses the liquidity risk of significant business activities and concentration to a particular source of funding, such as large depositors/funding providers, investment account holders, wholesale market funding or holdings of a particular asset class; and
(c) Withdrawal risk of investment account holders ('IAH') /deposit outflows — this assesses the liquidity risk arising from honouring redemptions by investment account holders of unrestricted investment accounts at the level of individual funds in case of Islamic windows.
July 2018