Liquidity - an introduction

The primary function of Liquidity is the provision of sufficient assets in realisable form to permit the Society to meet its financial commitments as they arise and absorb any potential cash flow requirements created by maturity mis-matches. In determining the Liquidity strategy, consideration is given to the quality, availability and cost of liquidity.

The Investment team is also responsible for the use of derivatives to control financial risks resulting from the Society's business activities. Unlike other types of institution who can use derivatives to increase risk, Section 9a of the Building Society Act 1986 restricts the usage of derivative instruments by Building Societies to the reduction of risk only.

Liquidity