Supervision and Regulation Letters

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SR 17-11:

Interagency Frequently Asked Questions on Implementation of the Liquidity Coverage Ratio (LCR) Rule

BOARD OF GOVERNORS
OF THE FEDERAL RESERVE SYSTEM
WASHINGTON, D.C. 20551

DIVISION OF
SUPERVISION AND REGULATION

SR 17-11
October 23, 2017

TO THE OFFICER IN CHARGE OF SUPERVISION AT EACH FEDERAL RESERVE BANK

SUBJECT:

Interagency Frequently Asked Questions on Implementation of the Liquidity Coverage Ratio (LCR) Rule

Applicability:  This guidance applies to bank holding companies, savings and loan holding companies, and state member banks subject to the LCR or the modified LCR rules, as described below. The guidance does not apply to community banking organizations with $10 billion or less in consolidated assets.

The Federal Reserve, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency (collectively, the "agencies") are jointly issuing the attached Frequently Asked Questions ("FAQs") regarding implementation of the LCR and modified LCR rules.1 In the attached FAQs, the agencies provide interpretations based on the facts and circumstances described in each question. The purpose of the FAQs is to clarify certain aspects of the existing LCR and modified LCR rules for supervised institutions and supervisory staff based on questions that the agencies have received since the rules were published. As the agencies issue additional FAQs in response to questions received, the Federal Reserve will periodically update the FAQ document that is attached to this SR letter. These and any subsequent FAQs also will be maintained on the Board's public website.2

The LCR rule applies to bank holding companies, savings and loan holding companies without significant insurance or commercial operations, and state member banks with $250 billion or more in total assets or $10 billion or more in on-balance sheet foreign exposure and to these holding companies' subsidiary depository institutions that have total consolidated assets of $10 billion or more. The modified LCR rule applies to bank holding companies and savings and loan holding companies without significant insurance or commercial operations that, in each case, have $50 billion or more in total consolidated assets but do not meet the thresholds stated above to be covered by the LCR rule.3

Reserve Banks are asked to distribute this letter to institutions in their districts that are subject to the LCR or modified LCR rules, as well as to their supervisory staff. Questions regarding this letter should be addressed to the following staff in the Board's Risk Policy Section:  Christopher Powell, Supervisory Financial Analyst, at (202) 452-3442; and Peter Clifford, Manager, at (202) 785-6057. In addition, questions may be sent via the Board's public website.4

signed by
Michael S. Gibson
Director
Division of
Supervision and Regulation

Attachments:

Liquidity Coverage Ratio:  Frequently Asked Questions

Notes:
  1. See "Liquidity Coverage Ratio:  Liquidity Risk Measurement Standards," 79 Fed. Reg. 61440 (Oct. 10, 2014), codified at 12 CFR part 249.  Return to text
  2. See https://www.federalreserve.gov/supervisionreg/topics/liquidity-coverage-ratio-faqs.htm.  Return to text
  3. See 12 CFR part 249 subpart G.  Return to text
  4. http://www.federalreserve.gov/apps/contactus/feedback.aspx  Return to text
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Last Update: October 23, 2017