Financial Liquidity Risk Management for Energy Industry Market Participants
© Copyright 2025, CCRO. All rights reserved. 2
Our draft outline:
1. Executive Summary
1.1. Overview of financial liquidity risk in the energy sector
1.2. Key challenges and lessons learned from financial liquidity events
1.3. Purpose and scope of this guidance
2. Introduction
2.1. Defining liquidity risk in energy markets
2.2. Importance of effective liquidity risk management
2.3. Stakeholder perspectives (executives, regulators, investors, etc.)
3. Sources of Liquidity Risk
3.1. Market volatility and price spikes (e.g., gas and power markets)
3.2. Counterparty credit risk
3.3. Geopolitical risks
3.4. Margining requirements for trading and hedging activities
3.5. Regulatory changes and compliance costs
3.6. Operational risks (e.g., weather events, supply disruptions)
4. Current industry practices and gaps
4.1. The CCRO industry survey
4.2. Survey analysis results
5. Managing Liquidity Risk: A Practical Framework
5.1. Identifying and assessing liquidity risks
5.2. Monitoring and stress testing
5.3. Mitigation strategies (e.g., buffers, financing options)
5.4. Crisis response and recovery planning
6. Practical Guidance and Best Practices
6.1. Building resilience through robust financial planning
6.2. Establishing liquidity buffers and credit lines
6.3. Strategies for stakeholder communication during crises
6.4. Phased implementation of a liquidity risk framework
7. Tools and Techniques
7.1. Metrics and models for liquidity analysis
7.2. Margin and collateral management strategies
7.3. Scenario planning for extreme market events
7.4. Takeaways from the CCRO Liquidity Risk Summit of solution providers
8. Governance and Oversight
8.1. Role of leadership in risk management
8.2. Cross-functional collaboration (Risk, Finance, Trading)
9. Conclusion
10.Appendices
10.1. Glossary of terms
10.2. Sample of liquidity risk crisis events
10.3. Sample stress test templates
© Copyright 2025, CCRO. All rights reserved. 2
Our draft outline:
1. Executive Summary
1.1. Overview of financial liquidity risk in the energy sector
1.2. Key challenges and lessons learned from financial liquidity events
1.3. Purpose and scope of this guidance
2. Introduction
2.1. Defining liquidity risk in energy markets
2.2. Importance of effective liquidity risk management
2.3. Stakeholder perspectives (executives, regulators, investors, etc.)
3. Sources of Liquidity Risk
3.1. Market volatility and price spikes (e.g., gas and power markets)
3.2. Counterparty credit risk
3.3. Geopolitical risks
3.4. Margining requirements for trading and hedging activities
3.5. Regulatory changes and compliance costs
3.6. Operational risks (e.g., weather events, supply disruptions)
4. Current industry practices and gaps
4.1. The CCRO industry survey
4.2. Survey analysis results
5. Managing Liquidity Risk: A Practical Framework
5.1. Identifying and assessing liquidity risks
5.2. Monitoring and stress testing
5.3. Mitigation strategies (e.g., buffers, financing options)
5.4. Crisis response and recovery planning
6. Practical Guidance and Best Practices
6.1. Building resilience through robust financial planning
6.2. Establishing liquidity buffers and credit lines
6.3. Strategies for stakeholder communication during crises
6.4. Phased implementation of a liquidity risk framework
7. Tools and Techniques
7.1. Metrics and models for liquidity analysis
7.2. Margin and collateral management strategies
7.3. Scenario planning for extreme market events
7.4. Takeaways from the CCRO Liquidity Risk Summit of solution providers
8. Governance and Oversight
8.1. Role of leadership in risk management
8.2. Cross-functional collaboration (Risk, Finance, Trading)
9. Conclusion
10.Appendices
10.1. Glossary of terms
10.2. Sample of liquidity risk crisis events
10.3. Sample stress test templates
