The LiquidityatRisk (short: LaR) is a quantity to measure financial risks and is the maximum net liquidity drain relative to the expected liquidity position which should not be exceeded at a given confidence level (e.g. 95%). The LaR is analog to the ValueatRisk (VaR) where a quantile of the EBITdistribution is considered, however it does take stochastic cash flows into account.^{[1]}^{[2]}
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Liquidity Risk – The Calm Before the Storm?

CAIIB Types of Risk Liquidity Risk

Liquidity Risk Introduction
Transcription
Critics
Statistical measures for financial risk are not intuitive. Increasing the confidence level (e.g. from 99.0% to 99.9%) does not capture very rare events with possibly high impact. The only way around is to use extreme value theory for modelling the distribution tails. In other words: Statistical liquidity risk modelling approaches do not provide certainty in terms of a reliable lower limit for future liquidity.
See also
References
 ^ "LiquidityatRisk (LaR) of a German private bank". extremevaluetheory.com. Buxtehude, Germany: RC BankenConsulting GmbH & Co. KG. 2011. Retrieved 12 January 2016.
 ^ Conzen, Sander (6 September 2009). Liquidity at Risk (LaR) und LiquidityValue at Risk (LVaR): Zwei neue Ansätze für das Liquiditätsmanagement (in German) (Frankfurt School of Finance & Management ed.). Hamburg, Germany: Diplomica. ISBN 9783836635004. Retrieved 12 January 2016.