Banking


The federal banking agencies, in conjunction with the Conference of State Bank Supervisors (CSBS), released a policy statement on their expectations for sound funding and liquidity risk management practices. The Interagency Policy Statement on Funding and Liquidity Risk Management, adopted by the FDIC, the Federal Reserve, the Office of the Comptroller of the Currency, the Office of Thrift Supervision, the National Credit Union Administration and the CSBS, summarizes the principles of sound liquidity risk management issued previously and, when appropriate, supplements them with the Principles for Sound Liquidity Risk Management and Supervision (tinyurl.com/yk8ondu) issued in September 2008 by the Basel Committee on Banking Supervision.

 

The policy statement, effective May 21, reiterates the importance of effective liquidity risk management for the safety and soundness of financial institutions. It emphasizes the importance of cash flow projections, diversified funding sources, stress testing, a cushion of liquid assets and a formal, well-developed contingency funding plan as primary tools for measuring and managing liquidity risk. The agencies expect each financial institution to manage funding and liquidity risk using processes and systems that are commensurate with the institution’s complexity, risk profile and scope of operations.

 

The policy statement is available at tinyurl.com/y9forwb.

 

More from the JofA:

 

 Find us on Facebook      Follow us on Twitter

 

SPONSORED REPORT

How to make the most of a negotiation

Negotiators are made, not born. In this sponsored report, we cover strategies and tactics to help you head into 2017 ready to take on business deals, salary discussions and more.

VIDEO

Will the Affordable Care Act be repealed?

The results of the 2016 presidential election are likely to have a big impact on federal tax policy in the coming years. Eddie Adkins, CPA, a partner in the Washington National Tax Office at Grant Thornton, discusses what parts of the ACA might survive the repeal of most of the law.

QUIZ

News quiz: Scam email plagues tax professionals—again

Even as the IRS reported on success in reducing tax return identity theft in the 2016 season, the Service also warned tax professionals about yet another email phishing scam. See how much you know about recent news with this short quiz.