Liquidity risk managers in the financial services and energy industries must work feverishly to evaluate the salability of assets and to identify potential liquidity problems. In the cover story, Gordon Goodman tracks the evolution of liquidity risk management in the energy industry and analyzes the development of liquidity provisions that have increased the difficulty of buying and selling energy commodities.
For banks, stress testing and contingency planning are key elements of a liquidity risk management framework. Damian Banwell offers advice for designing a contingency plan and explains how stress testing can help banks control cash flow gaps.
Financial services firms must adequately prepare for material operational risk concentrations (MORCs) — rare operational risk events capable of producing huge losses. Christopher Hall and John Hargreaves identify problems posed by MORCs and ask whether the current treatment of material credit risk exposures should serve as a model for diffusing low-probability, high-impact operational risk threats.
Hedge funds must manage a variety of risks. Dr. Lars Jaeger compares the risks hedge funds manage versus the risks facing more traditional businesses and explores steps hedge funds must take to integrate risk management.
This issue also has interesting articles on Risk People, Insurance Risk, Interest-Rate Derivatives and Basel II. The Risk Careers article explores GARP’s recent global compensation survey. | 
