o Capital investment needs and O&M liquidity
2. Sources of Financial Liquidity Risks
• Counterparty Risk
o Defaults or downgrades leading to cash flow disruptions
• Market Volatility
o Price swings increasing margin requirements or causing liquidity strain
• Regulatory Changes
o Compliance with evolving capital and collateral requirements
• Cash Flow Timing
o Mismatches in settlement schedules or seasonal variability
• Funding Challenges
o Reliance on short-term credit or debt refinancing risks
3. Liquidity Risk Analytics and Governance
• Analytics Models
o Adoption of third-party software, ETRM systems, personal spreadsheets, or bespoke tools
o Evaluation of model alternatives, strengths, and limitations
• Governance Structure
o Assigning responsibility across origination/structuring, trading, middle office, treasury,
credit, and financial planning functions
o Best practices for reporting metrics, identifying limit breaches, and executing mitigation
measures
o Regulatory and Financial Reporting requirements
4. Liquidity Management Metrics
• Key Performance Indicators (KPIs)
o Operating Cash Flow Coverage, Current Ratio, Days Liquidity Available
o Debt Service Coverage Ratio (DSCR), Free Cash Flow (FCF)
• Key Risk Indicators (KRIs)
2. Sources of Financial Liquidity Risks
• Counterparty Risk
o Defaults or downgrades leading to cash flow disruptions
• Market Volatility
o Price swings increasing margin requirements or causing liquidity strain
• Regulatory Changes
o Compliance with evolving capital and collateral requirements
• Cash Flow Timing
o Mismatches in settlement schedules or seasonal variability
• Funding Challenges
o Reliance on short-term credit or debt refinancing risks
3. Liquidity Risk Analytics and Governance
• Analytics Models
o Adoption of third-party software, ETRM systems, personal spreadsheets, or bespoke tools
o Evaluation of model alternatives, strengths, and limitations
• Governance Structure
o Assigning responsibility across origination/structuring, trading, middle office, treasury,
credit, and financial planning functions
o Best practices for reporting metrics, identifying limit breaches, and executing mitigation
measures
o Regulatory and Financial Reporting requirements
4. Liquidity Management Metrics
• Key Performance Indicators (KPIs)
o Operating Cash Flow Coverage, Current Ratio, Days Liquidity Available
o Debt Service Coverage Ratio (DSCR), Free Cash Flow (FCF)
• Key Risk Indicators (KRIs)
