Tools for Liquidity Testing

posted on Tuesday, September 15, 2020 in Advances

Requesting an overnight advance from FHLB Des Moines and paying it back the next day is a fast, simple and easy way to manage liquidity and funding risk. 

Take a look at the tools and information we have available:

Download a step-by-step guide that walks through the process including:

  • Instructions for the testing process from requesting the advance and repaying the funds
  • Accessing eAdvantage
  • Contact information for the Money Desk and the Service Desk

Find best practices when determining how and when to conduct an effective liquidity test. This checklist is a great resource for:

  • Members who haven't conducted a liquidity test or requested an Overnight Advance in a while.
  • New authorized users at your institution who may be unfamiliar with conducting an operational liquidity test or requesting an Overnight Advance from FHLB Des Moines.

Our Advance Transaction Guide helps members understand the logistics of requesting an advance:

  • Who/when/where an advance can be initiated
  • Information on how interest is billed
  • Tips for avoiding overdraft fees

Given the ever-changing business dynamics created by the COVID-19 pandemic, more institutions are increasing their efforts to ensure adequate liquidity stress testing of processes and procedures. Here are three reasons why liquidity stress testing should remain a critical part of your institution’s liquidity risk management plan:
Confirm your Credit: Validate you have adequate collateral pledged to access FHLB Des Moines advances quickly. Performing a variety of liquidity testing scenarios with different amounts and at different times during the day demonstrates this to your regulator.

  1. Practice your (new) Processes: With more employees working from home, has your institution changed your internal processes and procedures? 
  2. Validate Users: Do all of the authorized individuals at your institution understand how to request an FHLB Des Moines advance both over the phone and through eAdvantage?