Barclays 2013 Annual Report Download - page 210

Barclays has a comprehensive Liquidity Risk Management Framework (the Liquidity Framework) for managing the Group’s liquidity risk. The
Liquidity Framework meets the PRA’s standards and is designed to ensure the Group maintains liquidity resources that are sufficient in amount
and quality and a funding profile that is appropriate to meet the liquidity risk appetite. The Liquidity Framework is delivered via a combination of
policy formation, review and governance, analysis, stress testing, limit setting and monitoring.
Liquidity risk is managed separately at Barclays Africa Group Limited (BAGL) due to local currency and funding requirements. Unless stated
otherwise, all disclosures in this section exclude BAGL and they are reported on a stand-alone basis. Adjusting for local requirements, BAGL
liquidity risk is managed on a consistent basis to Barclays Group.
For further detail on liquidity risk governance and framework see page 418.
Liquidity risk stress testing
Under the Liquidity Framework, Barclays has established a Liquidity Risk Appetite (LRA) together with the appropriate limits for the management
of the liquidity risk. This is the level of liquidity risk the Group chooses to take in pursuit of its business objectives and in meeting its regulatory
obligations. The key expression of the liquidity risk is through internal stress testing. This involves comparing the liquidity pool with anticipated
stressed net contractual and contingent outflows for each of three stress scenarios.
Liquidity Risk Appetite
The three primary liquidity stress scenarios run by the Group under its LRA and aligned to the PRA’s prescribed stresses are:
 90 day market-wide stress event;
 30 day Barclays-specific stress event; and
 combined 30 day market-wide and Barclays-specific stress event.
Under normal market conditions, the liquidity pool is managed to be at least 100% of anticipated outflows under each of these stress scenarios.
The 30 day Barclays-specific stress scenario, results in the greatest net outflows of each of the liquidity stress tests. The combined 30 day scenario
assumes outflows consistent with a firm-specific stress for the first two weeks of the stress period, followed by relatively lower outflows consistent
with a market-wide stress for the remainder of the stress period.
Risk review
Funding risk – Liquidity
Liquidity risk is the risk that a firm, although solvent, either does not have sufficient financial resources
available to enable it to meet its obligations as they fall due, or can secure such resources only at excessive
cost. This also results in a firm’s inability to meet regulatory liquidity requirements. This risk is inherent in all
banking operations and can be affected by a range of Group-specific and market-wide events.
All disclosures in this section (pages 208 to 224) are unaudited and exclude BAGL unless otherwise stated
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208 Barclays PLC Annual Report 2013