Continuation
Another example would be as following.
The price risk involved when the price of a commodity fluctuates
during the period between:
-
the date of delivery
-
and the date on which it is sold
at the prevailing market price.
In order to mitigate this risk, an IIFS must have in place an
appropriate framework.
That framework is for managing the market risk of all assets
held, including those that:
-
do not have a ready market
-
and/or are exposed to high price volatility.
Liquidity risk
Similar to conventional institutions, IIFSs also face the
challenge of managing their asset and liability mismatches.
From the research paper of
European Central Bank
(Authors: F.Mauro, P.Caristi, S.Couderc, A.D.Maria, L.Ho,
B.K.Grewal, S.Masciantonio, S. Ongena and S.Zaher)
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