International Framework for Liquidity Risk Measurement,Standards and Monitoring:Corporate Governance and Internal Controls
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This paper is structured in accordance with identified components which are considered to be
essential to the successful implementation of the (two fold) topics of discussion of this paper,
namely, monitoring and liquidity risk measurements. The importance of successfully
communicating results obtained from monitoring and measuring such risks, and the role of
corporate governance in ensuring such effective communication, constitutes a recurring theme
throughout this paper. The identified components are as follows: i) Corporate governance (ii)
Internal controls (iii) Disclosure (iv) Management of risk (v) Substance over form (vi)
Transparency
As well as highlighting the interdependence of these components, the paper also aims to accentuate
the importance of individual components. Whilst no hierarchy of importance is assigned to these
components, corporate governance and internal controls are two components which are analysed
in greater depth (than other components). Furthermore, corporate governance could be accorded a
status of greater importance than internal controls having regard to the fact that whilst internal
controls relate to a very vital control aspect of an organisation, corporate governance relates to all
processes – be it decision making, control, production, performance, within a company/bank.
The paper will also attempt to demonstrate that it is possible to implement a system of regulation
which combines increased formalised procedures and/or detailed rules - whilst giving due
consideration to the substance of transactions
Keywords
HG Finance