OSFI Finalizes Guidelines on Liquidity Adequacy and NSFR Disclosures
OSFI published the final Liquidity Adequacy Requirements (LAR) guideline and the net stable funding ratio (NSFR) disclosure requirements guideline. All deposit-taking institutions are expected to comply with liquidity coverage ratio (LCR), net cumulative cash flow (NCCF) metrics, and Liquidity Monitoring Tools parts of the revised guideline by January 01, 2020. Additionally, designated domestic systemically important banks (D-SIBs) are expected to comply with NSFR requirements of the guideline by January 01, 2020.
The revised LAR guideline will help financial institutions enhance their resilience to short-term liquidity stresses and will ensure that they maintain stable funding profile over the longer-term. The environment in which Canadian financial institutions operate has evolved considerably since the LCR and the NCCF metrics were issued in 2014. Some institutions increasingly rely on deposit funding that may experience higher risk of withdrawals in periods of stress. Such funding models can amplify risks for both individual institutions and for the financial system at large. To help mitigate this risk, OSFI has introduced targeted changes to the LAR’s LCR and NCCF metrics that better reflect the increased risks posed by different types of retail deposits that may be subject to sudden withdrawals.
Additionally, Chapter 3 of the revised LAR guideline implements NSFR in Canada for D-SIBs. Following a public consultation in February 2019, OSFI issued the final version of the NSFR guideline. This guideline sets out the NSFR disclosure requirements for D-SIBs. The disclosures for funding risk will complement NSFR requirement of OSFI and encourage transparency, comparability, and market discipline related to this key liquidity measure. The Annex summarizes the material comments received and the respective responses of OSFI. The guideline takes effect with the quarterly reporting period ending January 31, 2021.
Related Links
Effective Date: January 01, 2020
Keywords: Americas, Canada, Banking, Liquidity Risk, LAR Guideline, NSFR, Basel III, Disclosures, D-SIBs, OSFI
Previous Article
ISDA Publishes Statement on FRTB Implementation in Emerging MarketsRelated Articles
|
News
CFTC Proposes to Amend Derivatives Clearing Organization RegulationsCFTC proposed amendments to certain regulations applicable to registered derivatives clearing organizations (DCOs) under Part 30 of the CFTC regulations.
May 16, 2019
WebPage
Regulatory News
|
|
News
APRA Licenses Societe Generale As Foreign Deposit-Taking InstitutionAPRA granted Societe Generale a license to operate as a foreign authorized deposit-taking institution under the Banking Act of 1959.
May 16, 2019
WebPage
Regulatory News
|
|
News
EBA Provides Updates on Its Work on Basel III Impact Assessment in EUEBA is working to finalize the impact assessment on implementation of Basel III standards, in response to the EC call for advice, which was received on May 04, 2018.
May 16, 2019
WebPage
Regulatory News
|
|
News
FED Publishes Report Summarizing Regulatory and Supervisory ActivitiesFED published a report that summarizes banking conditions and the supervisory and regulatory activities of FED, in conjunction with semiannual testimony before Congress by the Vice Chairman for Supervision.
May 15, 2019
WebPage
Regulatory News
|
|
News
US Agencies Propose to Amend Regulatory Framework for Foreign BanksUS Agencies (OCC, FED, and FDIC) proposed a regulatory framework for foreign banks operating in the U.S. that would more closely match the rules for foreign banks with the risks they pose to the U.S. financial system.
May 15, 2019
WebPage
Regulatory News
|
|
News
ECB Consults on EONIA to €STR Legal Action PlanECB published a consultation, which was launched by the working group on euro risk-free rates, on recommendations to address the legal implications for new and legacy contracts referencing the euro overnight index average (EONIA), as a result of the proposed transition from EONIA to the euro short-term rate (€STR).
May 15, 2019
WebPage
Regulatory News
|
|
News
FASB Offers Targeted Transition Relief Under Credit Losses StandardFASB issued an Accounting Standards Update 2019-05 (on Topic 326) that eases transition to the credit losses standard by providing the option to measure certain types of assets at fair value.
May 15, 2019
WebPage
Regulatory News
|
|
News
European Council Adopts Updated Rules on Clearing of OTC DerivativesEuropean Council adopted a regulation improving the existing regulatory framework applicable to the market for over-the-counter (OTC) derivatives.
May 14, 2019
WebPage
Regulatory News
|
|
News
European Council Adopts Package on CRD 5, CRR 2, BRRD 2, and SRMR 2European Council adopted a comprehensive legislative package that will reduce risks in the banking sector and further reinforce banks' ability to withstand potential shocks.
May 14, 2019
WebPage
Regulatory News
|
|
News
EBA Single Rulebook Q&A: Second Update for May 2019EBA published answers to two questions under the Single Rulebook question and answer (Q&A) updates for this week.
May 10, 2019
WebPage
Regulatory News
|
