Basel Committee Completes Review of Principles for Sound Liquidity Risk Management and Supervision.

The Basel Committee on Banking Supervision (Committee) completed its review of the 2008 Principles for sound liquidity risk management and supervision without making any changes and confirming that  the principles remain fit for their purpose.  This means that there are no new regulatory burdens for credit unions related to liquidity standards under Basel standards.  This is consistent with WOCCU's advocacy urging the Committee to limit compliance burdens for community-based depository institutions.

The Committee advised continued vigilance of liquidity risks in financial markets noting that significant developments in financial markets since the publication of the Principles that can cave bearing on liquidity.  These include the following:

  1. Digitisation of finance and payment systems and the broader growth of financial technology;
  2. A greater use of central clearing of derivatives and margining; and
  3. The increasing risk and magnitude of cyber-attacks.

The Committee noted the importance of financial institutions establishing a robust liquidity risk management framework and urged continued adherence to the broader liquidity risk management considerations set out in the Principles.

The press release can be viewed here.