Unencumbered cash is cash, and assets convertible to cash the same day, that the firm holds free of any pledge, margin requirement or restriction and can use at once. A liquidity buffer is the part of it held against stressed outflows (margin calls, collateral returns, redemptions, loss of financing) over a defined horizon, and not used to fund positions.
Quantitative Finance · Glossary
What is Unencumbered cash, liquidity buffer?
Also known as: unencumbered cash · liquidity buffer