The liquidity lifeline

On the priority list of risk managers and regulators, liquidity has long been cast as the poor relation to capital. Under the Basel framework, supervisors have expended a great deal of effort ensuring banks hold adequate capital to manage credit and market risks, while adopting a more laissez-faire approach to the way they actually fund their activities. But the financial crisis demonstrated the worrying extent to which banks had come to rely on short-term, unstable sources of funding to acquire