Funding patterns and liquidity management of internationally active banks

Abstract

The risks and complexities associated with funding and liquidity management of international banks became apparent during the global financial crisis. As liquidity in major bank funding and FX swap markets evaporated, sizeable maturity mismatches across currencies added to balance sheet pressure on internationally active banks.

This report, prepared by a Study Group chaired by Mário Mesquita of the Central Bank of Brazil, investigates changes in funding and liquidity management of international banks in response to these developments. It also presents the Group's preliminary assessment of possible consequences of greater decentralisation in funding and liquidity management for the efficiency and resilience of financial systems.

JEL classification: F34, F36, G01, G21