Liquidity Management

Management of liquidity risk is an important element in the bank's operations.

Liquidity Management

The parent company and the subsidiaries are subject to external regulatory liquidity requirements. However, the parent and the subsidiaries have internal liquidity targets that are more stringent than those of the regulator.

Maturing debt to be covered with liquid assets for 12 months

Glitnir Bank's policy assumes that the bank has immediately available funds covering all maturing debt, other than core deposits, for the following six months. In addition, all debt maturing within the following twelve months must be covered with immediately available funds and other liquid assets.

Liquid back-up assets

Immediately available funds are defined as cash, short-term placements with credit institutions, and the bank's liquidity portfolio, bonds eligible for repurchase agreements at Central Banks and committed credit facilities. Other liquid assets are defined as listed bonds and equities, and the part of the loan book that can be easily liquidated at a reasonable haircut. A conservative haircut is taken for each of the asset classes described above when adding up the bank's liquid assets. Contractual inflow from long-term lending is not included in liquid assets.

Liquidity Management