FED is proposing to revise and extend, for three years, the interagency policy statement on funding and liquidity risk management (FR 4198; OMB No. 7100-0326). The guidance summarizes principles of sound liquidity risk management that the agencies had identified in the past and, where appropriate, harmonized those principles with the “Principles for Sound Liquidity Risk Management and Supervision,” which were issued by BCBS in September 2008. The consultation period ends on August 26, 2019. FED also published a supporting statement for the interagency policy statement on funding and liquidity risk management.
The interagency policy statement on funding and liquidity risk management (guidance) was issued to provide consistent interagency expectations on sound practices for managing funding and liquidity risk. FED is proposing to revise FR 4198 to account for certain aspects of the guidance that include recordkeeping provisions for liquidity risk management policies, procedures, and assumptions and contingency funding plans. At present, FR 4198 does not account for the recordkeeping provisions for contingency funding plans and does not fully account for the recordkeeping provisions related to liquidity risk management policies, procedures, and assumptions.
The guidance also includes a number of voluntary recordkeeping provisions that apply to bank holding companies, savings and loan holding companies, state-licensed branches and agencies of foreign banks (other than insured branches), corporations organized or operating under sections 25 or 25A of the Federal Reserve Act, and state member banks. The estimated number of respondents for implementing recordkeeping is 30 and for ongoing recordkeeping is 4,789. No required reporting forms are associated with the guidance (the FR 4198 designation is for internal purposes only). The documentation required by the guidance is maintained by each institution; therefore, the documentation is not collected or published by FED. The guidance was published jointly by the agencies; however, there has been no consultation outside of the Federal Reserve System with regard to the current proposal to extend the FR 4198 for three years, with revision.
Comment Due Date: August 26, 2019
Keywords: Americas, US, Banking, FR 4198, Supporting Statement, Liquidity Risk, BCBS Principles, FED
Previous ArticleEC Issues Corrigendum to Regulation Related to Solvency II
HM Treasury announced that the new Financial Services Bill has been introduced in the Parliament.
PRA published the consultation paper CP17/20 to propose changes to certain rules, supervisory statements, and statements of policy to implement elements of the Capital Requirements Directive (CRD5).
US Agencies adopted a final rule that applies to advanced approaches banking organizations and aims to reduce interconnectedness in the financial system as well as to reduce contagion risks associated with the failure of a global systemically important bank (G-SIB).
US Agencies (FDIC, FED, and OCC) adopted a final rule that implements the net stable funding ratio (NSFR) for certain large banking organizations.
FSB finalized the toolkit of effective practices to assist financial institutions in their cyber incident response and recovery activities.
ECB published eleventh issue of the Macroprudential Bulletin, which provides insight into the ongoing work of ECB in the field of macro-prudential policy.
HM Treasury issued a call for evidence seeking views to reform the prudential regulatory regime—also known as Solvency II—of the insurance sector in UK.
ESRB responded to the EC consultation on review of Solvency II regime.
HM Treasury launched a consultation on Phase II of the Future Regulatory Framework Review, with the comment period ending on January 19, 2021.
EC adopted the work program for 2021.