Timeframe for new rules extended
Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Sun, 10 Mar 2019 16:19:36 +0000
Subsidiary and quasi-banks have been given more time to comply with new liquidity rules under the Basel III Framework, the Bangko Sentral ng Pilipinas (BSP) said late last week.
In a statement, the BSP said its policymaking Monetary Board had approved the extension of the observation period for liquidity coverage ratio (LCR) and net stable funding ratio (NSFR) compliance by subsidiary banks/quasi-banks (QBs) of universal and commercial banks (U/KBs) to end-December 2019, with the effectivity date of both ratios set for January 1 next year.
“This is to give covered banks/QBs sufficient time to build up their liquidity position given the combined impact of these liquidity measures,” the central bank said.
The previous observation period deadline was December 31, 2018 and the rules should have taken effect January 1 this year.
During the extended observation period, subsidiary banks/QBs are required to comply with a 70 percent LCR and NSFR floor.
“Covered subsidiary banks/QBs that are unable to meet the 100 percent LCR and NSFR minimum requirement for two consecutive weeks during the observation period are expected to adopt a liquidity build-up plan even if their said ratios meet the 70 percent floor,” the BSP said.
The Monetary Board also approved enhancements to LCR and minimum liquidity ratio (MLR) guidelines “in response to feedback received as a result of the BSP’s continuing dialogue with the banking industry.“
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