Inform the board about the reasons for and implications of excess liquidity, outline various potential strategies that the bank could employ to manage and thus reduce excess liquidity stating any potential downsides, and then state your preferred strategy and your rationale for this choice.

Description

Liquidity in the Australian Banking Sector is currently very high. This poses a strategic opportunity for bank executives who must decide how to most effectively utilise or manage this liquidity. Your team of consultants has been asked to address the board and senior management of a medium sized regional ADI.

Assignment Topic

Your task is to inform the board about the reasons for and implications of excess liquidity, outline various potential strategies that the bank could employ to manage and thus reduce excess liquidity stating any potential downsides, and then state your preferred strategy and your rationale for this choice.

The PowerPoint presentation must be prepared using the following headings:

1. Background

2. Benefit/Cost Assessment

3. Liquidity Management Strategies

4. Recommended Strategy

5. Conclusion

6. References

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