Cash is king. This may be a cliché, but it also happens to be true. If your balance sheet is bulging with greenbacks, it’s almost impossible to default. By contrast, you can have capital buffers in the billions, but if they’re not liquid enough, even Croesus-like sums won’t be able to save you from default. Just ask Lehman Brothers. Yet carrying too much cash when everything is stable is inefficient.

To learn how to optimize your liquidity buffers in unprecedented environments, check out Alla Gil’s latest column in GARP.