1. Liquidity risk -- problems may come about through changes in asset prices, a badly matched balance sheet, or withdrawal of credit lines by other financial institutions. 2. Contagion effects have caused abnormal liquidity risk to some of these undercapitalised financial institutions. 3. First, to reduce liquidity risk, business enterprises must actrationally. 4. Liquidity risk caused by a weakened currency is generally less visible butthe adverse impact for some can be painful. 5. There is an urgent need to manage liquidity risk in orderto conserve income and shareholder funds. 6. Theserisks cover credit risk, liquidity risk, interest rate risk andoperational risk. 7. What are the simple rules to manage liquidity risk? |