Liquidity Day 4: How Banks Organise and Govern Liquidity
1 February 2026·13 min
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In this session of the Liquidity Management course from The Industry Portal, we move from theory into practice by examining how banks structure themselves to manage liquidity risk on a day to day basis. This lesson focuses on the organisational setup, governance framework, and supporting systems that enable banks to identify, control, and respond to liquidity risk across the business.
You will gain a clear understanding of the roles played by Treasury, Liquidity Risk Management, Finance, Technology, and senior management in maintaining a resilient liquidity position. We explain how responsibilities are divided, how oversight and challenge are applied, and why coordination across teams is essential when managing a risk that can materialise rapidly.
The session explores how Treasury manages daily cash positions, funding strategies, liquidity buffers, and market access, while Liquidity Risk Management provides independent oversight through limits, stress testing, scenario analysis, and regulatory engagement. We also cover the critical role of Finance in providing balance sheet data, behavioural assumptions, and regulatory reporting, as well as the growing importance of Technology in delivering accurate, timely, and automated liquidity insights.
Governance is a central theme throughout this session. You will learn how Boards set liquidity risk appetite, how executive management oversees liquidity through ALCO, and how specialist liquidity committees support escalation and decision making. We also explain how the three lines of defence model applies to liquidity risk and why clear accountability is essential under stress.
This lesson also examines the systems and infrastructure that support modern liquidity management. Topics include liquidity reporting engines, real time dashboards, forecasting and stress testing tools, funds transfer pricing systems, and regulatory reporting platforms for metrics such as the Liquidity Coverage Ratio and Net Stable Funding Ratio. We discuss the challenges of data integration across products, currencies, entities, and geographies, and why data governance has become a core capability.
For international banks, the session explains how liquidity is managed across legal entities and jurisdictions, including ring fencing, local buffer requirements, intragroup funding, and regulatory expectations from authorities such as the PRA and ECB. We also cover communication with central banks and counterparties, liquidity dry runs, contingency planning, and the importance of organisational culture in effective liquidity management.
By the end of this video, you will understand what a robust liquidity management framework looks like in practice and why people, processes, systems, and governance matter just as much as metrics. This session sets the foundation for the next part of the course, where we begin a deep dive into regulatory frameworks starting with the Liquidity Coverage Ratio.
liquidity managementliquidity riskliquidity governancebank treasurytreasury managementliquidity risk managementalcoasset and liability committeethree lines of defencebanking governancefunds transfer pricingftp
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