A framework for measuring and managing liquidity

Note: This document has been superseded by Sound Practices for Managing Liquidity in Banking Organisations (Basel Committee Publications No. 69, February 2000)

In its work on the supervision of liquidity, the Basle Committee has focused on developing a greater understanding of the way in which international banks manage their liquidity on a global basis, on the premise that supervision of liquidity is particularly effective if based on a dialogue between bank and supervisor. This paper brings together practice and techniques currently employed by major international banks in a single analytical framework. While no bank may follow this framework precisely, it is a model which is believed to be an example of current sound management practice and which could provide useful guidance to all banks.