Adopting best practices in Liquidity risk Management with Nidhi Singh

Nov 25, 2024

Nidhi Singh, Director of Americas Treasury Risk at UBS with over 12 years in quantitative risk modeling, shares her expertise in liquidity risk management. She discusses the implications of Federal Reserve rate cuts on funding rates and financial institutions. Nidhi offers practical strategies for risk managers, focusing on lessons learned from the SVB collapse. The conversation also highlights how liquidity risk influences long-term investment strategies and the critical role of regulatory oversight in navigating these challenges.

Ask episode

AI Snips

Chapters

Transcript

Episode notes

ANECDOTE

Career Shift

Nidhi Singh's career path shifted from chemistry to finance after the 2008-2009 financial crisis.
She pursued an MBA in finance, specializing in quantitative risk modeling, starting with credit and market risk.

INSIGHT

Rate Cut Complexities

Recent Fed rate cuts make funding cheaper for financial institutions, but also create complexities.
Lower rates can cause depositors to seek higher returns elsewhere, impacting banks' liquidity.

INSIGHT

Regional Bank Crisis Factors

The 2023 regional bank crisis stemmed from banks investing in long-duration portfolios during low-interest-rate periods.
Rapid rate hikes exposed unrealized losses, leading to contagion, deposit withdrawals, and asset-liability mismatches.

Get the Snipd Podcast app to discover more snips from this episode

Get the app

In this insightful episode of The Risk Management Show, we’re joined by Nidhi Singh, Director of Americas Treasury Risk at UBS, NYC.

With over 12 years of experience in quantitative risk modeling and reporting to the Board and Risk Committees, Nidhi shares her expertise on navigating the evolving landscape of liquidity risk in a challenging economic environment.

Our conversation centers around the implications of continuing Federal Reserve rate cuts, exploring their effects on funding rates, financial institutions, and broader market dynamics. We also dive into practical strategies for risk managers, regulatory insights, and lessons learned from recent crises, such as the SVB collapse.

Key Topics Discussed:

Career Path Insights: Nidhi shares her journey into risk management and her current role at UBS.

Fed Rate Cuts and Liquidity Management: How should companies rethink their liquidity practices?

Are smaller banks at greater risk in a low-rate environment? Challenges for Risk Managers: Priorities to adopt in response to declining funding rates.

Strategic Adjustments: Ways financial institutions can mitigate liquidity risks and optimize decision-making in this environment.

Investor Decision-Making: How liquidity risk shapes long-term investment strategies.

Regulatory Oversight: The role of regulators in addressing liquidity challenges.

Post-SVB Crisis Adjustments: Lessons learned from the 2023 regional bank crisis. Measures taken by the Federal Reserve to strengthen the system. Adoption of new tools and techniques for balance sheet management.

Economic Uncertainty: The impact of rate cuts on the cost of capital for businesses and consumers.

Common Misconceptions: Nidhi debunks a major myth in the liquidity risk space.

Key Takeaways: Practical steps for companies and risk managers to adapt to a low-interest-rate landscape. Insights on how regulatory bodies and institutions can work together to stabilize liquidity. Reflections on past crises to inform future strategies. Listen Now: Available on Spotify, Apple Podcasts, and Google Podcasts.

If you want to be our guest or suggest one, send your email to info@globalriskconsult.com with the subject line “Guest Opportunity.” Stay informed on Risk Management, Cyber Security, and Sustainability with Global Risk Community, and explore how foresight can make you future-ready!