Strategies Aimed at Mitigating Liquidity Risk in the Aftermath of the Recent Financial Crisis

Abstract

In this study the key strategies of managing liquidity risk in the aftermath of the financial crisis are examined and it’s concluded that the key strategies that could be implemented to mitigate liquidity risk include need to consolidate smaller banks, increase capitalization to banks and increase banks supervision per Basel III requirements. An additional conclusion is that results from studies conducted to ascertain the effectiveness of the reforms and policies to manage liquidity risk after the financial crisis appear to indicate that the strategies have had positive impacts. Finally it may be difficult for developing countries to implement Basel III requirements.