Funding liquidity
Funding liquidity is the availability of credit to finance the purchase of financial assets.Liquidity is the key source of revenue for banks, and can be provided by either depositors or markets.The possibility that a bank could become unable to settle obligations with immediacy is called Funding Liquidity Risk.Funding liquidity risk, however, can take infinitely many values because it is related to the distribution of future outcomes.Conversely, funding liquidity risk is always forward-looking and measured over a specific horizon.