What is Liquidity management?

What is liquidity management?
As an undergraduate who’s looking at internships I want to know more, especially about sectors in Finance. As a Trader I find analysis fun and really interesting. However, Trading is probably different to what banks do. What pathways is similar to trading and doing analysis that would make sense as Looking for internships i see terms that I’ve never seen which are all exciting and new for example sales and trading, Liquidity management, private equity , investment banking. What pathway do you think is appropriate allowing me to have an advantage in . Internships do teach what you do but what is a good pathway to take which somewhat aligns with what I done before

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At the most basic level, liquidity management is whether or not your institution has enough money to keep the lights on. If it's at a F500-type company, that's going to be the function of the corporate treasury department to issue long/short-term debt and manage credit lines from banks. And on the flip side of that, they will also invest that "liquidity" and hold them in more liquid assets to earn interest while having that cash available if necessary.

If it's at a larger bank (think GSIB), you're going to have a full funding desk in multiple regions around the world that issue debt, trade in the front-end, leave money with their regional central bank, and work very closely with their repo & STIR desk (either in-house or affiliate). Under Basel III, they will have liquid investment portfolios in HQLA and multiple teams upon teams to governing the entire liquidity space, including liquidity stress testing, asset-liability management, deposit modeling, banking book interest rate risk management, etc.

The term liquidity management is very broad and can range from very complex at large institutions to a team of one to two persons at a small firm.

 

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