---
title: "Liquidity Risk: Navigating Uncertain Times"
description: Read this blog by Dave Wicklund, Former Senior FDIC Examiner & Capital Markets Expert, to learn how to ensure your liquidity is within policy limits.
image: https://blog.plansmith.com/hubfs/UncertainTimes.png
---

[CALL TOLL-FREE 1-800-323-3281](https://www.plansmith.reachproductions.net/project/call-toll-free-1-800-323-3281/)

[![Plansmith](https://blog.plansmith.com/hs-fs/hubfs/Plansmith-Logo.png?width=764&height=135&name=Plansmith-Logo.png "Plansmith")](https://www4.plansmith.com)

- Solutions 
    - [Budgeting](https://www4.plansmith.com/budgeting/)
    - [ALM](https://www4.plansmith.com/alm) 
          - [ALM Advisory Services](https://www4.plansmith.com/alm/advisory-services/)
    - [CECL](https://www4.plansmith.com/cecl/)
    - [Strategy](https://www4.plansmith.com/strategy/) 
          - [Market Intelligence](https://www4.plansmith.com/market-intelligence/)
- Products 
    - [StrategyGPS](https://www4.plansmith.com/strategygps/)
    - [Compass](https://www4.plansmith.com/compass/)
    - [BankersGPS](https://www4.plansmith.com/bankersgps/)
- Resources 
    - [Blog](https://blog.plansmith.com/)
    - [Videos](https://plansmith.wistia.com/projects/7qemazkqii)
    - [Compass Tutorials](https://info.plansmith.com/compass-tutorials)
    - [Lunch N’ Learn](https://info.plansmith.com/lunch-n-learns)
    - [Webinars](https://www4.plansmith.com/webinars/)
    - [About](https://www4.plansmith.com/about/)
- [Schedule A Discovery Call](https://www4.plansmith.com/contact-us/)
- [CALL TOLL-FREE 1-800-323-3281](tel:8003233281)

# Plansmith Blog

# Liquidity Risk: Navigating Uncertain Times

Posted by [Dave Wicklund](https://blog.plansmith.com/author/dave-wicklund) on 2/2/26 12:30 PM

- [Tweet](https://twitter.com/share)

What do massive shifts in deposits, economic uncertainty, and falling interest rates have in common? The potential to wreak absolute havoc on your institution’s liquidity position. One unplanned or mismanaged situation could mean falling out of policy limits, or worse.

Before we dig into what the present state of the economy could mean for your organization’s liquidity position, let’s make sure we’re on the same page with what we’re discussing. Per the [OCC](https://www.occ.treas.gov/topics/supervision-and-examination/capital-markets/balance-sheet-management/liquidity/index-liquidity.html), “Liquidity is the risk to a bank's earnings and capital arising from its inability to timely meet obligations when they come due without incurring unacceptable losses. Bank management must ensure that sufficient funds are available at a reasonable cost to meet potential demands from both funds providers and borrowers.”

Institutions should understand the importance of being able to “monetize” assets quickly to meet funding needs, and to identify if your deposit base is susceptible to potential “herd behavior.” In essence, is your organization adequately prepared to meet significant funding needs should they arise?

Under “normal” circumstances, liquidity may not be top of mind – just another assumed check box that’s probably still okay. However, as we know all too well, there is nothing normal about the past few years. Not only are we seeing organizations falling out of policy limits, we’re also seeing potential problem areas that could materially worsen should market liquidity further tighten.

So, what can you do to make sure you have a healthy liquidity management program? Here are a few considerations to ensure you’re in compliance and can handle what may lie ahead.

1. Adequately train your staff, ALCO, and Board of Directors

Personnel at all levels have a fiduciary responsibility to understand, manage, and monitor funding risks. Read more about the specifics of these responsibilities by clicking [here](https://blog.plansmith.com/what-your-board-needs-to-know-and-how-to-train-them). If you are concerned that your staff and board may not be adequately trained, Plansmith can help.

1. Regularly review your Policy Limits

As times and circumstances change, your policy limits and compliance should be reviewed more frequently. Financial institutions may find themselves out of compliance more quickly than they’d think. 

1. Ensure your Budgeting, Forecasting, and Liquidity Measurement Systems   
   are adequate

While under times of limited rate fluctuations and otherwise little economic uncertainty, it may be fairly simple to apply basic ratios or averages in a spreadsheet or simple report format. However, under more stressful environments, more robust platforms could truly mean the difference between a successful or problematic exam. For example, our Compass software includes easy to use tools that take liquidity and cash flow modeling to more in-depth levels. By using our automated cash flow models or outsourcing the process of liquidity stress testing to us, your management team will be able to make better-informed business decisions and more easily stay in compliance with regulatory expectations.

Again, during normal times, liquidity may be a back-burner topic; but, with interest rates on the decline, material deposit withdrawals could be on the near horizon – making now the perfect time to ensure your liquidity management plan is adequate. In addition to powerful software tools, our Advisory/Professional Services team of former FDIC and NCUA examiners is always available to help you. If you have any questions or would like to discuss how Plansmith can help your bank or credit union, please [click here](https://share.hsforms.com/1qXsn2LH6S6GAQyqw22QVQw1enno) to open a dialogue.

 

![Wicklund Head Shot 1-1](https://blog.plansmith.com/hs-fs/hubfs/Wicklund%20Head%20Shot%201-1.jpg?width=109&height=136&name=Wicklund%20Head%20Shot%201-1.jpg)Dave Wicklund  
*Director of ALM Advisory Services*

 

 

 Topics: [liquidity](https://blog.plansmith.com/topic/liquidity), [board training](https://blog.plansmith.com/topic/board-training), [policy](https://blog.plansmith.com/topic/policy), [contingency funding plan](https://blog.plansmith.com/topic/contingency-funding-plan)

### Subscribe Now!

### Posts by Tag

- [community bank planning (52)](https://blog.plansmith.com/topic/community-bank-planning)
- [community bank strategy (52)](https://blog.plansmith.com/topic/community-bank-strategy)
- [community bank (49)](https://blog.plansmith.com/topic/community-bank)
- [community bank budget software (45)](https://blog.plansmith.com/topic/community-bank-budget-software)
- [credit union planning (44)](https://blog.plansmith.com/topic/credit-union-planning)
- [community bank budgeting (42)](https://blog.plansmith.com/topic/community-bank-budgeting)
- [budgeting (39)](https://blog.plansmith.com/topic/budgeting)
- [interest rate risk (35)](https://blog.plansmith.com/topic/interest-rate-risk)
- [community bank interest rate risk (33)](https://blog.plansmith.com/topic/community-bank-interest-rate-risk)
- [community bank budget (30)](https://blog.plansmith.com/topic/community-bank-budget)
- [strategic planning (28)](https://blog.plansmith.com/topic/strategic-planning)
- [asset liability management (27)](https://blog.plansmith.com/topic/asset-liability-management)
- [interest rate risk management (27)](https://blog.plansmith.com/topic/interest-rate-risk-management)
- [community bank marketing strategy (26)](https://blog.plansmith.com/topic/community-bank-marketing-strategy)
- [fintech (26)](https://blog.plansmith.com/topic/fintech)
- [community bank ALCO (25)](https://blog.plansmith.com/topic/community-bank-alco)
- [social media for community banks (24)](https://blog.plansmith.com/topic/social-media-for-community-banks)
- [strategy (24)](https://blog.plansmith.com/topic/strategy)
- [IRR (22)](https://blog.plansmith.com/topic/irr)
- [bank strategy (21)](https://blog.plansmith.com/topic/bank-strategy)
- [social media (20)](https://blog.plansmith.com/topic/social-media)
- [strategic thinking (20)](https://blog.plansmith.com/topic/strategic-thinking)
- [ALCO (19)](https://blog.plansmith.com/topic/alco)
- [community bank forecasting (17)](https://blog.plansmith.com/topic/community-bank-forecasting)
- [strategic planning for banks (17)](https://blog.plansmith.com/topic/strategic-planning-for-banks)
- [ceo (16)](https://blog.plansmith.com/topic/ceo)
- [Strategic Plan (12)](https://blog.plansmith.com/topic/strategic-plan)
- [bank strategic planning software (12)](https://blog.plansmith.com/topic/bank-strategic-planning-software)
- [community bank planning software (12)](https://blog.plansmith.com/topic/community-bank-planning-software)
- [leadership (12)](https://blog.plansmith.com/topic/leadership)
- [CECL (11)](https://blog.plansmith.com/topic/cecl)
- [Customer Service (9)](https://blog.plansmith.com/topic/customer-service)
- [playbook (9)](https://blog.plansmith.com/topic/playbook)
- [alm (8)](https://blog.plansmith.com/topic/alm)
- [bank budget (8)](https://blog.plansmith.com/topic/bank-budget)
- [bank irr reporting (8)](https://blog.plansmith.com/topic/bank-irr-reporting)
- [liquidity (8)](https://blog.plansmith.com/topic/liquidity)
- [credit union interest rate risk (7)](https://blog.plansmith.com/topic/credit-union-interest-rate-risk)
- [crisis planning (7)](https://blog.plansmith.com/topic/crisis-planning)
- [forecasting (7)](https://blog.plansmith.com/topic/forecasting)
- [budget playbook (6)](https://blog.plansmith.com/topic/budget-playbook)
- [compass (6)](https://blog.plansmith.com/topic/compass)
- [Outsource IRR (5)](https://blog.plansmith.com/topic/outsource-irr)
- [banker education (5)](https://blog.plansmith.com/topic/banker-education)
- [surge deposits (5)](https://blog.plansmith.com/topic/surge-deposits)
- [bank mission vision core values (4)](https://blog.plansmith.com/topic/bank-mission-vision-core-values)
- [continuing education (4)](https://blog.plansmith.com/topic/continuing-education)
- [credit union budgeting (4)](https://blog.plansmith.com/topic/credit-union-budgeting)
- [millennials (4)](https://blog.plansmith.com/topic/millennials)
- [reforecasting (4)](https://blog.plansmith.com/topic/reforecasting)
- [IRR Assumptions (3)](https://blog.plansmith.com/topic/irr-assumptions)
- [board training (3)](https://blog.plansmith.com/topic/board-training)
- [branch budgeting (3)](https://blog.plansmith.com/topic/branch-budgeting)
- [decay rate (3)](https://blog.plansmith.com/topic/decay-rate)
- [millennial employees in banking (3)](https://blog.plansmith.com/topic/millennial-employees-in-banking)
- [rising rates (3)](https://blog.plansmith.com/topic/rising-rates)
- [what-ifs (3)](https://blog.plansmith.com/topic/what-ifs)
- [AI (2)](https://blog.plansmith.com/topic/ai)
- [FDIC (2)](https://blog.plansmith.com/topic/fdic)
- [backtesting (2)](https://blog.plansmith.com/topic/backtesting)
- [bank brand marketing (2)](https://blog.plansmith.com/topic/bank-brand-marketing)
- [board of directors (2)](https://blog.plansmith.com/topic/board-of-directors)
- [compliance (2)](https://blog.plansmith.com/topic/compliance)
- [cost center budgeting (2)](https://blog.plansmith.com/topic/cost-center-budgeting)
- [deposit study (2)](https://blog.plansmith.com/topic/deposit-study)
- [deposit trends (2)](https://blog.plansmith.com/topic/deposit-trends)
- [funds transfer pricing (2)](https://blog.plansmith.com/topic/funds-transfer-pricing)
- [market intelligence (2)](https://blog.plansmith.com/topic/market-intelligence)
- [millennials in banking (2)](https://blog.plansmith.com/topic/millennials-in-banking)
- [modern human resources strategy for banks (2)](https://blog.plansmith.com/topic/modern-human-resources-strategy-for-banks)
- [peer analysis (2)](https://blog.plansmith.com/topic/peer-analysis)
- [stress testing (2)](https://blog.plansmith.com/topic/stress-testing)
- [Insider (1)](https://blog.plansmith.com/topic/insider)
- [asset prepayments (1)](https://blog.plansmith.com/topic/asset-prepayments)
- [baby boomers (1)](https://blog.plansmith.com/topic/baby-boomers)
- [brand (1)](https://blog.plansmith.com/topic/brand)
- [client spotlight (1)](https://blog.plansmith.com/topic/client-spotlight)
- [contingency funding plan (1)](https://blog.plansmith.com/topic/contingency-funding-plan)
- [credit union strategic planning software (1)](https://blog.plansmith.com/topic/credit-union-strategic-planning-software)
- [employee human resources for banks (1)](https://blog.plansmith.com/topic/employee-human-resources-for-banks)
- [event (1)](https://blog.plansmith.com/topic/event)
- [financial institution succession planning (1)](https://blog.plansmith.com/topic/financial-institution-succession-planning)
- [funding (1)](https://blog.plansmith.com/topic/funding)
- [loan prepayments (1)](https://blog.plansmith.com/topic/loan-prepayments)
- [market analysis (1)](https://blog.plansmith.com/topic/market-analysis)
- [negative rates (1)](https://blog.plansmith.com/topic/negative-rates)
- [policy (1)](https://blog.plansmith.com/topic/policy)
- [ppp loans (1)](https://blog.plansmith.com/topic/ppp-loans)
- [profitability (1)](https://blog.plansmith.com/topic/profitability)
- [sensitivity testing (1)](https://blog.plansmith.com/topic/sensitivity-testing)
- [social video for banks (1)](https://blog.plansmith.com/topic/social-video-for-banks)
- [strategic action plan (1)](https://blog.plansmith.com/topic/strategic-action-plan)
- [trade show (1)](https://blog.plansmith.com/topic/trade-show)

See all

### Recent Posts

- Navigate 
    - [Home](https://www4.plansmith.com/)
    - [Budgeting](https://www4.plansmith.com/budgeting/)
    - [Asset Liability Management](https://www4.plansmith.com/alm/)
    - [CECL](https://www4.plansmith.com/cecl/)
    - [Strategy](https://www4.plansmith.com/strategy/)
    - [Market Intelligence](https://www4.plansmith.com/market-intelligence/)
    - [About](https://www4.plansmith.com/about/)
    - [Contact Us](https://www4.plansmith.com/contact-us/)
- Products 
    - [StrategyGPS](https://www4.plansmith.com/strategygps/)
    - [Compass](https://www4.plansmith.com/compass/)
    - [BankersGPS](https://www4.plansmith.com/bankersgps/)
- Resources 
    - [Blog](https://blog.plansmith.com)
    - [Videos](https://plansmith.wistia.com/projects/7qemazkqii)
    - [Compass Tutorials](https://info.plansmith.com/compass-tutorials)
    - [Lunch n' Learns](https://info.plansmith.com/lunch-n-learns)
    - [Webinars](https://www4.plansmith.com/webinars/)

#### Contact

1827 Walden Office Square, Ste. 350  
Schaumburg IL 60173

Toll Free: 1.800.323.3281  
Local: 1.847.359.4045  
Fax: 1.847.705.8200

info@plansmith.com

Copyright 2018 | Plansmith Corporation

```json
{
  "@context" : "https://schema.org",
  "@type" : "BlogPosting",
  "author" : {
    "@type" : "Person",
    "name" : "Dave Wicklund",
    "url" : "https://blog.plansmith.com/author/dave-wicklund"
  },
  "dateModified" : "2026-02-02T18:30:00.572Z",
  "datePublished" : "2026-02-02T18:30:00.000Z",
  "headline" : "Liquidity Risk: Navigating Uncertain Times",
  "image" : [ "https://blog.plansmith.com/hubfs/UncertainTimes.png" ],
  "mainEntityOfPage" : {
    "@id" : "https://blog.plansmith.com/liquidityrisk-navigating-uncertain-times",
    "@type" : "WebPage"
  },
  "publisher" : {
    "@type" : "Organization",
    "logo" : {
      "@type" : "ImageObject",
      "url" : "https://blog.plansmith.com/hubfs/Plansmith-Logo-Budgeting-ALM-Outsourcing-01.png"
    },
    "name" : "Plansmith"
  }
}
```