Supervisory Policy and Guidance Topics
Liquidity Risk Management
Liquidity is a financial institutionís capacity to meet its cash and collateral obligations without incurring unacceptable losses. Adequate liquidity is dependent upon the institutionís ability to efficiently meet both expected and unexpected cash flows and collateral needs without adversely affecting either daily operations or the financial condition of the institution. Liquidity risk is the risk to an institutionís financial condition or safety and soundness arising from its inability (whether real or perceived) to meet its contractual obligations. The primary role of liquidity-risk management is to (1) prospectively assess the need for funds to meet obligations and (2) ensure the availability of cash or collateral to fulfill those needs at the appropriate time by coordinating the various sources of funds available to the institution under normal and stressed conditions.Sections on this page:
Liquidity Risk Management
- SR 14-3
- Supervisory Guidance on Dodd-Frank Act Company-Run Stress Testing for Banking Organizations with Total Consolidated Assets of More Than $10 Billion but Less Than $50 Billion
- SR 12-7
- Supervisory Guidance on Stress Testing for Banking Organizations with More Than $10 Billion in Total Consolidated Assets
- SR 12-2
- Questions and Answers on Interagency Advisory on Interest Rate Risk Management
- SR 11-7
- Guidance on Model Risk Management
- SR 10-6
- Interagency Policy Statement on Funding and Liquidity Risk Management
- SR 10-1
- Interagency Advisory on Interest Rate Risk
- SR 03-15
- Interagency Advisory on the Use of the Federal Reserve's Primary Credit Program in Effective Liquidity Management
- SR 01-14 (SUP)
- Joint Agency Advisory on Rate-Sensitive Deposits
- SR 01-8 (SUP)
- Supervisory Guidance on Complex Wholesale Borrowings
- SR 97-4 (SUP)
- Interagency Guidance on Common Questions About the Application of the Revised CAMELS Rating System
- SR 96-38 (SUP)
- Uniform Financial Institutions Rating System
- SR 96-13 (SUP)
- Joint Policy Statement on Interest Rate Risk
- SR 95-46 (SPE)
- Interpretation of Interagency Statement on Retail Sales of Nondeposit Investment Products
- SR 95-39 (SUP)
- Examination Procedures for the New "Pass-Through" Deposit Insurance Disclosure Rules Concerning Employee Benefit Plan Deposits
- SR 94-49 (IB)
- Deposits Held in Foreign Branches of U.S. Banks
- SR 91-31
- Guidance to Foreign Banks in Complying with New Deposit-Taking Restrictions
- SR 90-31
- Bank Holding Company Funding from Sweep Accounts
- SR 90-3
- Foreign (Non-US) Currency Denominated Deposits Offered At Domestic Depository Institutions
Additional ResourcesBasel Committee on Banking Supervision Ė Principles for Sound Liquidity Risk Management and Supervision (September 2008)
Bank Holding Company Supervision Manual
- Section 2080.0, "Funding (Introduction)"
- Section 2080.05, "Bank Holding Company Funding and Liquidity"
- Section 4010.0, "Parent Only (Debt Servicing Capacity-Cash Flow)"
- Section 4020.4, "Banks: Liquidity"
Commercial Bank Examination Manual
- Section 3000.1, "Deposit Accounts"
- Section 4020.1, "Liquidity Risk"
Trading and Capital Markets Activities Manual
- Section 3005.1, "Liquidity Risk"
Last update: March 7, 2014