In a paper The liquidity of banks published in March 1981, the Bank set out the main principles of its intended approach to the prudential supervision of banks' liquidity. A further paper, entitled The measurement of liquidity, was circulated as a consultative document in the summer of 1981. That paper developed the principles of the earlier paper and proposed a common framework for measuring the liquidity of banks based on the expected cash flows arising from their assets and liabilities. The present final version is intended to provide the basis for assessing the adequacy of liquidity of all deposit-taking companies for the purposes of the Bank's continuing supervision under the Banking Act.
The measurement of liquidity - Paper issued by the Bank on 20 July 1982