WOCCU Supports Basel Committee Flexibility in Treatment of Liquidity-absorbing Monetary Policy Operations in the NSFRFebruary 05, 2018
In its letter, WOCCU voiced its support for the following:
- Reducing depository institutions’ Required Stable Funding (RSF) liquidity reserves to as low as a five percent RSF reserve factor for institutions’ claims on a central bank related to the central bank’s extraordinary “liquidity-absorbing operations,” including secured transactions with a residual maturity of more than six months.
- Providing depository institutions supervisors and central banks with increased flexibility vis-à-vis exceptional central bank operations to help promote financial stability, whether those exceptional central bank operations are to provide emergency liquidity or are to absorb excess liquidity in the banking system; and
- Providing a reduced RSF reserve factor for instruments used as collateral in connection with exceptional central bank liquidity operations.
A copy of the comment letter can be viewed here.