Built for Stress: Rethinking Liquidity Management in a new era of risk

A Regnology point-of-view paper in
collaboration with Chartis

Explore the paper in our Chartis collaboration series on financial risk management and asset and liability management (ALM). Learn why financial institutions must evolve their funding liquidity strategies to thrive in a climate defined by volatility, regulatory pressure, and rising depositor stress.

• A new era of risk 
  Aggressive rate changes, tightening credit conditions, and rising consumer stress are reshaping liquidity dynamics across every region. Depositor behavior is less predictable, and asset performance is more fragile. Banks need deeper insight and faster response. 
• From ratios to real-time response  
  Recent bank failures revealed a critical truth: meeting regulatory liquidity ratios doesn’t guarantee resilience. What matters is how quickly liquidity can be mobilized and sustained under stress.  
• Operational liquidity should be a strategic priority  
  Liquidity management must be integrated across treasury, risk, finance, and business teams. A shared view of real-time data, tools, and decision-making is now essential. 

• Impact on smaller institutions  
  Regional banks face growing challenges, including flight-to-safety behavior, digital competition, and limited emergency funding. For these institutions, robust liquidity planning is now a matter of survival. 
• Regional realities, global lessons  
  • US: The 2023 banking crisis underscored the importance of contingency execution and deposit-based stability 
  • Europe: Supervisors are emphasizing buffer usability and intraday liquidity tracking 
  • Asia: Institutions are strengthening USD funding visibility and reassessing exposure in low-yield portfolios