The Committee of European Banking Supervisors has published its Liquidity identity card ("Liquidity ID").
The purpose of the Liquidity ID is to provide supervisors of European cross-border groups with a single prudential language. This should enable them to gain a common understanding of the liquidity risk and resilience of the group and its entities, given the specificities of the group's business and its risk tolerance.
The Liquidity ID provides information on liquidity risk and liquidity risk management. It is designed to serve as a basis for planning and coordinating liquidity risk supervision within colleges of supervisors, as will be required under Article 129(1)(b) of the proposed revised Capital Requirements Directive (CRD). The common set of information should:
- Provide a clear overview of liquidity risk at the group level, including intra-group dependencies and limits to transfers of liquidity within the group.
- Enable rapid exchanges of information on the liquidity risk profile and positions of the entities of a cross-border group, and provide early warnings of possible liquidity difficulties at entities within the group.
- Ensure coordinated liquidity supervision across the group to the extent possible.
The Liquidity ID will also be a useful tool for the broader exchanges of information between home and host supervisors that are required by Article 42(a) of the proposed revised CRD. It should also capture any specific actions taken by host supervisors in the context of Article 30 of the same Directive.
View Liquidity identity card, 22 June 2009