(v) Risk management.

Managing Risk to Save the Poor

Weak management would inevitably limit competition, with a risk of monopolies.

So risk management, by smoothing out bumps in income, can be extremely important in alleviating the effects of poverty.

The response to the lack of liquidity is ever more liquidity.

The Liquidity Puzzle

Lower liquidity

Liquidity Ratios

The Liquidity Time Bomb

3. Liquidity ratio

All of this highlights the need for new benchmarks for performance and compensation that factor in vulnerability to periodic systemic risk, with special attention to debt and liquidity.

We need to ensure transparency and adequate risk management, measures on which are part of my proposal on capital requirements.

Is Liquidity Enough?

Liquidity position (consolidated)

NET DECREASE IN LIQUIDITY

That is the risk today.

Situations of risk

The third problem concerns international liquidity.

Another downside risk is that the dollar funded carry trade may unravel, crashing the global asset bubble that it, together with the wave of monetary liquidity, has caused. And, since the carry trade and the wave of liquidity are causing a global asset bubble, some of gold s recent rise is also bubble driven, with herding behavior and momentum trading by investors pushing gold higher and higher.

Another downside risk is that the dollar funded carry trade may unravel, crashing the global asset bubble that it, together with the wave of monetary liquidity, has caused.

Here an exporter faces two types of risk price risk and competitiveness risk.

Confronting the Coming Liquidity Crisis

What determines a liquidity crisis?

No liquidity in the economy left , whatsoever.

Risk management instruments of banks

But most of these policies with the possible exception of the banking union are aimed at managing default risk, not eliminating this risk s root causes.

Although the primary responsibility for its implementation rests with governments, collaboration and cooperation between all stakeholders in managing the risk is crucial.

The IMF recently established the Short Term Liquidity Facility to help strong performing members facing temporary liquidity problems.

At a time when many advanced countries run government deficits, GDP linked bonds would improve risk management and bring down financing costs.

And then, you know, we look for trends, that they're playing on, whether it'll be mobile, sensors, medical adherence, and then also helping um... uh... helping doing population management for... for high risk individuals.

Subsidizing labor, by contrast, is a pure injection of liquidity.

Statement IV. Liquidity position (consolidated) . 33

The liquidity position is assessed on the following basis

Schedule 2.3 Environment Fund liquidity position as at

Article 11 Situations of risk

But inaction has greater risks.

But generating enough liquidity implies huge expenses the public must be educated to understand the concept of risk management and overcome serious psychological barriers before it can be persuaded of the usefulness of the new instruments.

First, when will the current period of great international liquidity end?

Liquidity risk is best hedged through diversification across time.

So what accounts for the combination of macro liquidity and market illiquidity?

America s zombie consumers need to repair their damaged balance sheets, and US workers need to align new skills with new jobs. Open ended liquidity injections accomplish neither.

Open ended liquidity injections accomplish neither.

There is now a relative abundance of liquidity in private markets.

The second will be expensive and risky.

These benefits do not come without risk.