Liquidity risk: Are boards up to speed?

Are boards getting all the information they need from managers to determine if their fund has passed its liquidity stress test? Some may not and it is their responsibility if something then goes wrong.

These tests, incidentally, are almost certainly going to be required to be done more frequently and will become more comprehensive.

The board of the fund, not the manager of it, are of course responsible to the regulator in the jurisdiction where that fund is domiciled if something goes wrong. Liquidity risk management is becoming a much more important part of the board’s responsibilities, at least in EU jurisdictions and the UK.

To read more on this story, see the February issue of The NED.