Let’s talk do’s and don’ts.
Do:
1. Stress Test: Bad times don’t send a warning, but you can be better prepared. Regular stress testing helps.
2. Diversify: You know the saying, don’t put all your eggs in one basket? Same goes for your funding sources.
3. Monitor: Keep a close eagle eye on market trends and indicators. Stay one step ahead.
Don’t:
1. Overlook Internal Communication: Make sure all stakeholders are in the loop on liquidity risk scenarios and plans.
2. Underestimate Contingency Planning: A solid plan ‘B’ is essential. Build resilience into your liquidity strategy.
3. Get Complacent: A good liquidity position now doesn’t guarantee a rosy future. Always stay on your toes.
Strike the right balance, and you’ll keep that liquidity dance smooth and steady.
What did I miss? What’s your biggest do or don’t for managing liquidity?
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