Regulatory Agencies Release Addendum on Liquidity Guidance

The significant liquidity events experienced by a few banks in the first half of 2023 led regulatory agencies to release an addendum on liquidity and funding risk management guidance.

In this addendum, agencies underscored the importance of diversified funding sources and ensuring accessibility of funding sources through regular testing.  For contingent funding sources, institutions should have executed agreements and sufficient pledged collateral to ensure ready access.  Institutions are also reminded to consider the possibility of certain funding sources not being fully available in a crisis event. Finally, banks are encouraged to consider the Federal Reserve Bank’s Discount Window as a viable contingent funding source.

For information about this interagency statement, contact us. We are here to help.

©2023