The Committee of European Banking Supervisors (CEBS) has published a consultation paper on draft guidelines on liquidity cost benefit allocation.

The main objective of the draft guidelines is to provide high-level guidance to institutions on the main elements to be considered when creating or reviewing adequate fund allocation mechanisms including liquidity cost, benefits and risks. A liquidity cost concept that includes not only direct funding costs but also associated indirect costs such as liquidity contingency support is proposed.

Annex one of the draft guidelines also provides examples of mechanisms currently observed in certain institutions.

The deadline for comments on the consultation is 10 June 2010. A public hearing will be held at CEBS’s premises in London on 14 April 2010.

View CEBS draft guidelines on liquidity cost benefit allocation, 10 March 2010