likviditetstilsagn

Likviditetstilsagn, often translated as liquidity commitment, is a financial agreement where a party promises to provide funds or assets to another entity, typically a financial institution, under specific circumstances to ensure its liquidity. This is a crucial tool in financial market stability, acting as a safety net against unexpected cash flow shortages or market disruptions.

These commitments can come from various sources, including central banks, governments, or even other financial institutions. For example, a central bank might offer a liquidity facility, a form of liquidity commitment, to commercial banks experiencing temporary liquidity problems. This ensures that solvent banks do not face a collapse due to short-term funding issues. The terms of such a commitment usually detail the amount of funds available, the duration, the interest rate, and the collateral required.

Liquidity commitments are designed to prevent systemic risk. By having a reliable source of funding in times of stress, financial institutions can continue to operate, preventing a cascade of failures that could destabilize the broader economy. They are a proactive measure to maintain confidence in the financial system and ensure the smooth functioning of credit markets. The existence of such commitments can also deter speculative attacks on financial institutions, as potential attackers know that liquidity support is available.