Contingent liquidity captures cash or assets that are available when a stressing scenario materializes. The liquidity is contingent on the occurrence of the stress situation. Included within this category are financial assets that can be converted into cash without any material loss in value. Capturing contingent liquidity to cover stressed cash outflows represents the main reason for liquidity stress tests.

Liquid asset buffer: The liquid asset buffer represents the contingent liquidity that is currently in place … The fundamental characteristics of liquid asset buffer securities should include low credit and market risk, ease and certainty of valuation, trading in an active and sizable market, and low concentration of buyers and sellers. The liquid asset buffer should also meet operational requirements that ensure the liquidity is under the control of the central treasury area of the entity undergoing the stress test.