Fed's Kroszner on liquidity risk management

Liquidity risk should be evaluated and addressed on an enterprise-wide basis and should be tightly integrated with capital planning, said Randall Kroszner, a governor at the Federal Reserve.

Liquidity problems always had the potential to affect bank balance sheets and by that bank capital adequacy during times of system-wide stress, he added.

Addressing the central bank's efforts to boost financial market liquidity, Kroszner said that the term auction facility function was expected to continue as

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