Some things you own such as your nicest shirt or food in your refrigerator might be able to sold quickly. Others such as a rare collectible coin or custom painting of your family may be a bit more difficult. The relative ease in which things can be bought or sold is referred to as liquidity. […]

Liquidity risk management is critical to ensuring that cash needs are continuously met. Common ways to manage liquidity risk include maintaining a portfolio of high-quality liquid assets, employing rigorous cash flow forecasting, and diversifying funding sources. Additionally, compliance with regulatory frameworks that establish minimum liquidity standards serves as a proactive approach to managing liquidity risk. […]