Funding the Bank and Managing Liquidity.ppt

Funding the Bank and Managing Liquidity The Relationship Between Liquidity Requirements, Cash, and Funding Sources The amount of cash that a bank holds is influenced by the bank’s liquidity requirements The size and volatility of cash requirements affect the liquidity position of the bank Deposits, withdrawals, loan disbursements, and loan payments affect the bank’s cash balance and liquidity position Effect of Maturing Certificates of Deposit and Loan Use on a Bank’s Deposit Balances at theFederal Reserve Bank Funding Sources Retail Funding Deposit Accounts Transaction accounts Money market