ScotiabankScotiabankRisk Management in the BankLiquidity Managementi) Policy-Scotiabank believes liquidity risk is crucial in maintaining the confidence of the depositors and counter parties. This risk is managed within the framework of policies and limits that are approved by the Board of Directors. The Board has regular reports on risk exposures and risk performance against approved limits. The Liability Committe provides their senior management an oversight of the current liquidity risk and meets weekly to review the Bank’s liquidity profile.
The framework used to manage Scotiabank liquidity risk isSet limits to control the key elements of riskMeasure and forecast cash commitmentsDiversify funding sourcesMaintain appropriate holdings of liquid assetsConduct regular liquidity crisis stress testingMaintain contingency plans that can be activated to facilitate managing liquidity risk through a disruptionii) StrategiesThe Bank of Nova Scotia maintains large holdings of liquid assets to support its operations. These assets are available to be sold or pledged to meet the Bank’s obligations. The Bank relies on a broad range of funding sources. The main source of funding being capital, deposits drawn from retail and commercial clients domestic and international as well as wholesale funding. The bank does not
Sovereign Bank – The National Bank of Canada, established in 2008, has broad capital holdings in securities, bonds and other assets. The NBC was established as a national central bank in 1996 and established to be independent of central banks, as such it has only one of the highest liquidity requirements of any federal or provincial central bank.
The NBC’s major asset classes are public and private equity investments; commercial loans; and capital projects that are primarily defined as the purchase and distribution of a commodity or its derivatives.
The National Bank of Canada operates under the supervision of several other central banks across Canada, with a general balance sheet consisting primarily of public and private equity securities and corporate debt.
The National Bank carries out regular national-level liquid-currency support through the issuance of commercial bank notes, including the issuance of corporate currency, government debt.
Sovereign Bank of Canada Liquidity Risk Management (C&C) – The National Bank provides a diversified portfolio of various financial instruments – a broad range of bonds and other instruments which are available to be offered for sale in its preferred preferred trading market.
The NBL manages and manages the U.S. S&P 500 through the issuance of mortgage-backed securities. The NBD maintains its own derivatives markets and maintains a portfolio of securities holding an aggregate of $3.5 trillion of derivatives.
Reserve Bank of Canada Liquidity Risk Management (RBSI) – The Reserve Bank of Canada invests in securities, which is distributed through a range of securities issuers or funds, to support its operations, either in the financial system or on other means, for the purpose of reducing liquidity risk in international currency markets.
Reserve Bank of Canada liquidity risk management is designed to control and monitor liquidity risk in international currency markets to support its operations. The Reserve Bank maintains its own liquidity risk management programs and is committed to maintaining the maximum liquidity levels in the world. Reserve Bank of Canada liquidity risk management focuses on financial instruments to support a central bank’s liquidity operations to ensure a sustainable environment for international exchange rate fluctuations. This requires the Reserve Bank and certain key stakeholders working with it to conduct an integrated risk analysis to ensure that there are appropriate and effective management mechanisms to achieve the objectives set by this policy. A number of activities in the United States and Canada require the Reserve Bank to maintain an active reserve liquidity position. These activities include the Federal Reserve Bank of New York, the U.S. Treasury Department, the U.S. National Consumer Financial Protection Bureau, the U.S. Government Insurance Insurance Board, and the Federal Reserve Bank of St. Louis. There is extensive evidence of ongoing and persistent liquidity risk in various commercial bank subsidiaries and financial institutions around the world. Therefore, it would be appropriate and advisable to provide the Reserve Bank with a liquidity risk management strategy with some level of attention to the ability of the financial sector to maintain liquidity levels in international markets.
Many of the central banks around the world also employ other central banks to provide funding of foreign funds or deposits at government bond issuers.
Uncertainty Management – With the