FDIC issues liquidity guidance and encourages contingency funding
The US regulator has released recommendations on liquidity risk and encourages capital-raising initiatives as US banks feel the pinch
WASHINGTON, DC – US regulator the Federal Deposit Insurance Corporation (FDIC) has issued guidance on liquidity risk. The regulator says its recommendations are in response to the market turmoil, focusing on the risk of illiquidity within off-balance sheet exposures. Its capital adequacy recommendations cover capital-raising initiatives and contingency funding plans.
The regulator says: “Liquidity risk measurement and management systems should reflect an institution's complexity, risk profile and scope of operations. Institutions that use wholesale funding, securitisations, brokered deposits and other high-rate funding strategies should ensure their contingency funding plans address relevant stress events.”
The FDIC’s guidelines come as market commentators speculate on the possible failure of another large US bank, in the wake of the Bear Stearns buyout last March, and banks’ likely heavy risk exposures to ailing government-sponsored enterprises Fannie Mae and Freddie Mac – rumoured to be on the brink of further government intervention.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Regulation
French regulator wants permanent changes to EU’s output floor
Push for capital relief faces resistance from supervisors in Finland and the Netherlands
Council plans take Aquis, BME out of Esma oversight
German push to exempt Deutsche Börse catches three others, according to sources
Why watering down resolution plans is a bad idea
Bank failures are inevitable; banking crises are not
BIS’s Hernández de Cos on AI, non-bank risk and tokenisation
General manager talks about how the BIS is navigating a complex global environment
‘European SEC’ no silver bullet for growth
EU policymakers hope a single, centralised supervisor will help rev up Europe’s economy but critics are mustering
Permanent FRTB reforms seen as vital for IMA adoption
Temporary relief granted in June has done little to encourage internal model use in Europe
How to ensure the next Credit Suisse or SVB fails ‘well’
Regulators are planning changes to resolution rules after criticism that living wills were ignored in previous bank collapses
Asian firms waiting on exemptions from UST clearing mandate
Hoping for relief on extraterritoriality, 51% of Apac firms have yet to start compliance programmes
