Liquidity Stress Testing (FRM Part 2 2023 – Book 4 – Chapter 9)

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After completing this reading, you should be able to:
Differentiate between various types of liquidity, including funding, operational, strategic, contingent, and restricted liquidity.
Estimate contingent liquidity via the liquid asset buffer.
Discuss the matters about the liquidity stress test design, such as scope, scenario development, assumptions, outputs, governance, and integration with other risk models.