FSA Releases Consultative Paper 09/13 for Strengthening Liquidity Standards

The FSA has released Consultative Paper (CP) 09/13, which takes into account comments received in response to the pre-consultation on reporting which was set out in last December’s CP08/22: Strengthening liquidity standards. CP 09/13 sets out the FSA’s proposals for a new liquidity-reporting regime, which is part of the proposed overhaul of UK liquidity regulation. The new regime aims to up the ante on the way that liquidity risks are identified, measured, monitored, reported and governed.

Commenting on CP09/13, PJ Di Giammarino, CEO, JWG-IT, says: “We think the FSA is essentially saying ‘We appreciate it is going to be hard but get on with it, because we are serious’.

“Despite many of the 98 respondents to the 15 questions in CP 08/22 highlighting the practical issues associated in delivering new reports, the FSA has decided that liquidity problems need to be monitored daily. And for banks this means exactly what it says on the tin.
“The FSA recognises that reporting requirements may be costly to implement but believes the data concerned would normally be utilised by most firms during the normal course of business.

“In an important nod to the recent G20 meeting, it is also clear that the FSA is engaged in international efforts to align other regulators to its data-intensive approach – and then use this as the basis of cross-border benchmarks.”


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