New Liquidity Risk Guidance
July 1, 2009
Federal regulators proposed new guidance Tuesday that would call on financial institutions to more closely monitor their liquidity risk.
The guidance, which is open for comment for 60 days, "emphasizes the importance of cash flow projections, diversified funding sources, stress testing, a cushion of liquid assets, and a formal, well-developed contingency funding plan for measuring, monitoring and managing liquidity risk," the agencies said in a joint news release.
The proposal mirrors standards released by the Basel Committee on Banking Supervision in September as Wall Street firms crumbled under the weight of runs on their liquidity.
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