BANK 9.2.4 Liquidity management strategy
(1) A banking business firm's liquidity management strategy must include specific policies on liquidity management, such as:
(a) the composition and maturity of assets and liabilities;
(b) the diversity and stability of funding sources;
(c) the firm's approach to managing liquidity in different currencies, across borders, and across business lines and legal entities; and
(d) the firm's approach to intraday liquidity management.
(2) The strategy must take account of the firm's liquidity needs both under normal conditions and during periods of liquidity stress. The strategy must include quantitative and qualitative targets.
(3) The strategy must be appropriate for the nature, scale and complexity of the firm's operations. In formulating the strategy, the firm must consider its legal structure, its key business lines, the breadth and diversity of its markets and products, the jurisdictions in which it operates, and regulatory requirements.
(4) The firm's senior management must communicate the following throughout the firm:
(a) the strategy;
(b) the firm's key policies for implementing it;
(c) the firm's liquidity management structure.
|Inserted by QFCRA RM/2018-1 (as from 1st May 2018).|