Liquidity Management in Money Markets: A Foundational Training Course

Introduction

Liquidity management is a critical function in the financial world, ensuring that financial institutions have the necessary cash to meet their obligations while optimizing returns. This training course provides a comprehensive look at the principles and practices of liquidity management, with a specific focus on its role in the money markets. Participants will learn how to forecast liquidity needs, identify sources of funding, and manage liquidity risk in an increasingly volatile and interconnected global financial system. The program provides a solid foundation for understanding the operational challenges and strategic decisions that drive effective liquidity management.

The course delves into the tools and techniques used by central banks and commercial banks to maintain an adequate level of liquidity. We will explore key instruments like repos, reverse repos, and money market funds, as well as the impact of regulatory frameworks on liquidity practices. Through practical examples and case studies, participants will develop the analytical skills to assess liquidity risk, implement robust management strategies, and understand the crucial link between micro-level liquidity decisions and broader financial stability.

Target Audience

  • Central bank liquidity managers
  • Commercial bank treasury professionals
  • Financial regulators and supervisors
  • Portfolio managers and fund managers
  • Corporate finance and treasury staff
  • Academics and students of finance
  • Risk managers and compliance officers
  • Financial journalists

Duration

5 days

Course Objectives

Upon successful completion of this training, participants will be able to:

  • Explain the core principles of liquidity management.
  • Analyze the structure and function of money markets.
  • Forecast liquidity needs and manage cash flow efficiently.
  • Assess and mitigate liquidity risks.
  • Evaluate the role of central banks in providing liquidity.
  • Describe the impact of regulations on liquidity management.

Modules Course Content

Module 1: Foundations of Liquidity and Money Markets

  • Defining liquidity and its importance
  • The structure of money markets
  • Participants in the money markets
  • Key money market instruments (T-bills, commercial paper)
  • The role of interest rates in money markets

Module 2: The Central Bank's Role

  • The central bank as the ultimate liquidity provider
  • How central banks conduct open market operations
  • The use of standing facilities
  • The role of reserve requirements
  • Central bank communication and its effect on liquidity

Module 3: Liquidity Risk Management

  • Defining and measuring liquidity risk
  • The difference between funding and market liquidity risk
  • Stress testing and scenario analysis
  • Contingency funding plans
  • The role of the liquidity coverage ratio (LCR)

Module 4: Funding and Investment Strategies

  • Identifying sources of funding (wholesale and retail)
  • The use of repos and reverse repos
  • Investing surplus liquidity in money markets
  • The role of collateral management
  • Optimizing the funding mix

Module 5: Repurchase Agreements (Repos)

  • The mechanics of repo transactions
  • Types of repos (GC, special, bilateral)
  • The role of collateral and haircuts
  • The use of repos for liquidity management and financing
  • The role of a clearing house

Module 6: Managing Cash and Collateral

  • The importance of cash flow forecasting
  • Central bank cash management services
  • The role of collateral in secured funding
  • Optimizing collateral usage and eligibility
  • The relationship between cash and collateral

Module 7: Liquidity and Financial Stability

  • How liquidity crises can spread
  • The role of liquidity in systemic risk
  • Lessons from the 2008 financial crisis
  • The central bank's role as a lender of last resort
  • The impact of regulatory reforms on liquidity

Module 8: Regulatory Frameworks

  • The Basel III framework on liquidity
  • The Liquidity Coverage Ratio (LCR)
  • The Net Stable Funding Ratio (NSFR)
  • Other global and domestic regulations
  • The role of stress tests in regulation

Module 9: Technology and Innovation

  • The impact of financial technology on liquidity
  • The use of data analytics for liquidity forecasting
  • Digital currencies and their potential impact on liquidity
  • The role of automation in liquidity management
  • Cybersecurity risks in liquidity management

Module 10: Case Studies and Best Practices

  • Case study of a central bank's liquidity operations
  • Case study of a bank's liquidity crisis
  • Best practices for corporate treasury management
  • The global response to liquidity events
  • Future trends in liquidity management

CERTIFICATION

  • Upon successful completion of this training, participants will be issued with Macskills Training and Development Institute Certificate

TRAINING VENUE

  • Training will be held at Macskills Training Centre. We also tailor make the training upon request at different locations across the world.

AIRPORT PICK UP AND ACCOMMODATION

  • Airport Pick Up is provided by the institute. Accommodation is arranged upon request

TERMS OF PAYMENT

Payment should be made to Macskills Development Institute bank account before the start of the training and receipts sent to info@macskillsdevelopment.com

For More Details call: +254-114-087-180

 

 

Liquidity Management In Money Markets: A Foundational Training Course in Kenya
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