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    OCC Updates Accounting Advisory and Liquidity Booklets for Banks

    August 16, 2021

    The Office of the Comptroller of the Currency (OCC) updated the Bank Accounting Advisory Series, which reflects the accounting standards updates issued by the Financial Accounting Standards Board, addresses a variety of accounting topics, and promotes consistent application of accounting standards and regulatory reporting among OCC-supervised banks. Also updated was the “Liquidity” booklet (Version 1.1) of the Comptroller’s Handbook, which is prepared for use by OCC examiners in connection with the examination and supervision of national banks, federal savings associations, and federal branches and agencies of foreign banking organizations.

    The Liquidity booklet provides examiners with guidance on assessing the quantity of a bank's liquidity risk and quality of liquidity risk management. The updated booklet discusses risks associated with liquidity, includes information and examination procedures about liquidity coverage ratio, and added section on the net stable funding ratio requirements. The updated booklet also includes clarifying edits regarding supervisory guidance, sound risk management practices, or legal language and revises certain content for general clarity. The Version 1.1 of this updated booklet replaces Version 1.0 of the “Liquidity” booklet issued in June 2012. Additionally, OCC Bulletin 2012-17, “Liquidity: Comptroller's Handbook Revisions and Rescissions” has been rescinded. 

    The sophistication of the liquidity management process of a bank depends on its business activities and appetite for risk as well as on the overall level of liquidity risk. A well-managed bank, regardless of size and complexity, identifies, measures, monitors, and controls its exposure to liquidity risk in a timely and comprehensive manner. This booklet provides examiners with supplemental procedures for further analyzing the quantity of liquidity risk and quality of liquidity risk management. The expanded procedures in this booklet are for use when review extends beyond the core assessment in the “Community Bank Supervision,” “Federal Branches and Agencies Supervision,” and “Large Bank Supervision” booklets of the Comptroller’s Handbook.

     

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    Keywords: Americas, US, Banking, Liquidity Risk, Comptroller Handbook, Accounting, Reporting, Banking Supervision, Community Banks, NSFR, LCR, CECL, Accounting Standards Update, FASB

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