FINMA issued a consultation on amendments to the circular (2015/2) on liquidity risks for banks. The amendments relate to the technical implementing provisions and refinements to the new requirements for net stable funding ratio (NSFR), as set out in the Liquidity Ordinance. FINMA is introducing general adjustments to the qualitative requirements and to the liquidity coverage ratio (LCR), constituting clarifications and editing changes to the previous regulation. The consultation takes into account the timetable for adoption of the Liquidity Ordinance. The consultation period will run until July 13, 2020 while the corresponding changes are due to enter into force on July 01, 2021.
In November 2019, the Swiss Federal Council had decided to introduce NSFR for banks by mid-2021 and to make the corresponding adjustments to the Liquidity Ordinance. This also necessitated changes to the FINMA supervisory practice, as set out in the circular (2015/2) on liquidity risks for banks. As required in the Basel III minimum standards, banks must meet stricter liquidity requirements and fulfill internationally harmonized funding requirements. The Federal Council had adapted the Liquidity Ordinance in 2017 in line with these international rules, but had postponed the introduction of NSFR. FINMA had also adjusted the circular on liquidity risks for banks at that time and ran a consultation exercise. The present consultation, therefore, only concerns a number of clarifications and editing changes.
- Press Release
- Key Points to Consultation (PDF)
- Changes to Circular 2015/02 (PDF in German)
- Explanatory Report on Consultation (PDF in German)
Comment Due Date: July 13, 2020
Effective Date: July 01, 2021
Keywords: Europe, Switzerland, Banking, LCR, NSFR, Liquidity Risk, Liquidity Ordinance, Circular 2015/2, Basel III, Swiss Federal Council, FINMA
Previous ArticleESAs Defer Final Two Phases of Margin Rules for OTC Derivatives
In a recent Market Notice, the Bank of England (BoE) confirmed that green gilts will have equivalent eligibility to existing gilts in its market operations.
The Financial Conduct Authority (FCA) published the policy statement PS21/9 on implementation of the Investment Firms Prudential Regime.
The European Banking Authority (EBA) proposed regulatory technical standards that set out criteria for identifying shadow banking entities for the purpose of reporting large exposures.
The Board of the International Organization of Securities Commissions (IOSCO) proposed a set of recommendations on the environmental, social, and governance (ESG) ratings and data providers.
The European Commission (EC) announced plans to defer the application of 13 regulatory technical standards under the Sustainable Finance Disclosure Regulation (2019/2088) by six months, from January 01, 2022 to July 01, 2022.
The Bank of England (BoE) published a consultation paper on approach to setting minimum requirement for own funds and eligible liabilities (MREL), an operational guide on executing bail-in, and a statement from the Deputy Governor Dave Ramsden.
The European Banking Authority (EBA) is seeking preliminary input on standardization of the proportionality assessment methodology for credit institutions and investment firms.
Certain regulatory authorities in the US are extending period for completion of the review of certain residential mortgage provisions and for publication of notice disclosing the determination of this review until December 20, 2021.
The Prudential Regulation Authority (PRA) published the policy statement PS18/21, which introduces an amendment in the definition of "higher paid material risk taker" in the Remuneration Part of the PRA Rulebook.
The European Banking Authority (EBA) published its annual report on asset encumbrance in banking sector.