Assets that can be converted to cash quickly with little loss of value, even in stress. Cash and central bank reserves are the best examples.
Where you will meet it
High-quality liquid assets comes up in 6 learning outcome notes across the FRM syllabus.
A few of them:
Liquidity Risk FRM Part II · Liquidity and treasury risk measurement and management
“The Liquidity Coverage Ratio compares the stock of unencumbered high-quality liquid assets (HQLA) with net cash outflows over a 30-day stress period, using the regulatory definitions, eligibility criteria, haircuts and inflow caps.”
Solvency, Liquidity, and Other Regulation After the Global Financial Crisis FRM Part II · Operational risk and resilience
“The liquidity coverage ratio (LCR) compares high-quality liquid assets (HQLA) with net cash outflows over a 30-day stress period, using the regulatory definitions, eligibility criteria, haircuts and inflow caps.”
Liquidity and Leverage FRM Part II · Liquidity and treasury risk measurement and management
“It also holds a buffer of high-quality liquid assets and diversifies funding.”
Liquidity and Leverage FRM Part II · Liquidity and treasury risk measurement and management
“The liquidity coverage ratio is high-quality liquid assets divided by total net cash outflows over 30 stressed days.”
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