Highlights:
The proposed rule:
- Establishes a short-term quantitative minimum LCR that assesses exposures to
contingent liquidity events.
- Provides enhanced information about liquidity risk to managers and
supervisors, allowing for more effective oversight and supervision of
liquidity risk and appropriate supervisory responses.
- Facilitates a more orderly resolution of a covered company in the event of a
failure.
- Requires covered companies to maintain an amount of high quality liquid
assets, consisting of Level 1, Level 2A, and Level 2B liquid assets, that is
not less than 100 percent of the institution’s total net cash outflows
over a prospective 30-day period.
- Accounts for asset risk and promotes diversification with haircuts and caps.
- Addresses liquidity risk by applying a series of shocks, with prescribed
run-off and inflow rates against a bank’s assets, obligations, and
other funding sources.
- Requires covered companies to notify their primary federal regulator when a
liquidity shortfall exists (or when the LCR drops below 100 percent).
- Establishes transitions requiring covered companies to comply with a minimum
liquidity coverage ratio of 80 percent as of January 1, 2015, 90 percent as
of January 1, 2016, and 100 percent thereafter.
Distribution:
FDIC-Supervised
Banks (Commercial and Savings)
Suggested
Routing:
Chief Executive
Officer
Chief Financial Officer
Chief Risk Officer
Related
Topics:
Interagency
Policy Statement on Funding and Liquidity Risk Management
Attachment:
Liquidity Coverage
Ratio: Liquidity Risk Measurement, Standards, and Monitoring (PDF Help)
Contact:
Bobby Bean,
Associate Director, or Kyle Hadley, Chief, Exam Support Section, Division of
Risk Management Supervision, Capital Markets Branch, at BBean@fdic.gov, KHadley@fdic.gov,or (202) 898-6888
Note:
FDIC Financial
Institution Letters (FILs) may be accessed from the FDIC's Web site at http://www.fdic.gov/news/news/financial/2013/index.html.
To receive FILs electronically, please visit http://www.fdic.gov/about/subscriptions/index.html.
Paper copies may be obtained through the FDIC's Public Information Center, 3501
Fairfax Drive, E-1002, Arlington, VA 22226 (1-877-275-3342 or 703-562-2200).
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