Liquidity Stress Testing and Contingency Funding Plan

Liquidity Stress Testing and Contingency Funding Plan - Article

This article explains liquidity stress testing and the Contingency Funding Plan (CFP) through practical banking cases. It covers bank-specific, market-wide and combined stress scenarios, survival horizons, stressed cash flows, funding run-offs, collateral needs, management actions, CFP triggers, alternative funding sources, escalation and testing. It helps CAIIB BFM learners connect stress-test results with realistic liquidity-crisis preparedness and avoid common case-study traps.