The IIF paper establishes that the needs and strategies of individual institutions can vary for a variety of reasons, suggesting that any liquidity recommendations or guidelines must be seen as describing a “range of good practices” and not necessarily prescribing one “best” practice.
Governance and organisational structure are identified as critical in managing liquidity risk, given that no narrowly prescribed approaches can be followed, as liquidity issues arise in different ways for institutions with different structures and businesses. Another area of recommendations from the IIF concerns the coordination of supervisor’s efforts, suggesting the harmonisation of regulations where possible in order to foster sound internal risk management systems.