Liquidity Management

  • Christian Schmaltz


This section consists of two parts: first, we split the product cash flow and transfer the components to different departments (Cash Flow Transfer Model). In this manner, the transfer permits us to separate the management of cash flow and spread risk. A separate management is desirable as both risks have different characteristics and require different instruments. Furthermore, separate management reduces complexity. In the second part, we derive prices at which the components are transferred (Transfer Pricing). The transfer prices are based on the cost that the management of the components implies. In the dichotomy ’controlling’ versus ’management’, this section is more controlling-oriented. However, it is titled ’Liquidity Management’ as it describes the management process. Particularly, it discusses where which cash flow component is managed.


Liquidity Management Transfer Price Liquidity Risk Jump Size Model Horizon 
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© Gabler | GWV Fachverlage GmbH 2009

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  • Christian Schmaltz

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