Liquid assets examples7/28/2023 ![]() borrow new money from another depositor/investor, or.If depositors want to withdraw their deposits after a short time, the bank cannot immediately get money back from the home loan. This is because banks typically borrow a significant part of their funding from depositors for short terms (indeed, a substantial portion is available to be withdrawn at any time), while at the same time they often lend that money to customers for much longer terms, such as for a 30-year home loan. Liquidity riskīanks need to manage their funding liquidity risk carefully. This article focuses on funding liquidity, which is critical to the safety and stability of banks, credit unions and building societies (collectively referred to as ‘banks’ in this article), and which is central to the work done by APRA and its peer regulators around the world. Market liquidity: this relates to the ability of investors to trade assets in the market (for example, an asset is liquid if it can be easily sold in large amounts with only small changes in its price).Central bank liquidity: this relates to funding provided to market participants.Funding liquidity: this relates to the ability of banks to pay their debts when they are due.In relation to banks, there are three different types of liquidity that are relevant: Liquidity is an important consideration for all APRA-regulated entities: banks need to be able to pay depositors their money, superannuation funds need to be able to pay out benefits and requests for the release of funds, and insurers need to be able to pay claims – sometimes at short notice (such as the COVID-19 temporary early release of superannuation scheme, or the large number of insurance claims after the 2019/2020 summer bushfires). Australian Government deposit guarantee scheme sealĪt its most basic level, liquidity is the ability to access cash when it is needed.Financial Claims Scheme frequently asked questions.Deposit checker - Are your deposits protected?.Different banking businesses under one banking licence.List of authorised deposit-taking institutions covered.Banks, building societies and credit unions.Open/Close Menu Financial Claims Scheme.Questions about general, life and private health insurers.Questions about authorised deposit-taking institutions.APRA Explains - the Financial Claims Scheme.APRA’s place in the wider regulatory environment.Memoranda of understanding and letters of arrangement.Governance and Senior Executive Accountabilities.Open/Close Menu Accountability and reporting.Open/Close Menu Grants and scholarships.Industry supervision - frequently asked questions.APRA's licensing process - frequently asked questions.Open/Close Menu APRA's licensing process.Life insurance companies and friendly societies.Superannuation Data Transformation videos.Open/Close Menu Superannuation Data Transformation project.APRA Connect information security and technical specifications.Economic and financial statistics - frequently asked questions.Licensing non-operating holding companies. ![]()
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