While banks have significantly improved their liquidity positions with the implementation of post-financial crisis regulation, financial institutions need to reassess their risks and prepare for a wide range of potential outcomes. With interest rates currently near rock bottom, the effects of additional rate cuts may be limited.

Financial institutions have to be prepared for liquidity stress and interest rate changes, manoeuvring dynamically through current and potentially prolonged volatility and uncertainty due to the pandemic. This stress testing exercise needs a major overhaul and to be leveraged as a proactive tool for driving strategic action and survival.

Conference website