Banks must report intraday liquidity
Credit to Author: Mayvelin U. Caraballo, TMT| Date: Sun, 08 Dec 2019 16:15:20 +0000
Banks will soon need to report to the central bank their intraday liquidity, according to newly approved regulations by monetary authorities.
In a circular dated December 3, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said the Monetary Board last November 21 approved the implementation and adoption of the report on intraday liquidity for universal and commercial banks (UBs/KBs) and their subsidiary thrift banks (TBs)/quasi-banks (QBs).
“The report is aimed at appropriately monitoring the intraday liquidity position of Bangko Sentral-supervised financial institutions, their sources of intraday liquidity, and their ability to meet payment and settlement obligations on a timely basis under both normal and stressed conditions,” Diokno added.
The reporting requirements are also intended to facilitate the sound management of intraday liquidity risk as well as provide sufficient understanding and allocation of resources to effectively manage the same.
Diokno explained the central bank expects banks/QBs with large volume of daily payments and settlements to effectively manage their intraday liquidity positions and risks.
The report is also designed to measure and monitor the different aspects of a bank’s/QB’s intraday liquidity position.
“Banks/QBs should have policies, procedures and systems to support operational objectives in all of the financial markets and currencies in which they have significant payment and settlement activities,” the central bank said.
These tools and resources applied by a bank/QB in managing its intraday liquidity risks should also be tailored to its business model.
For standalone TBs/QBs and all rural banks/cooperative banks, Diokno said they shall be expected to maintain an adequate and reliable management information system that is able to monitor and report gross payments sent and received in the large value payment system and/or, where appropriate, across all accounts held with correspondent banks on a daily basis; and available intraday liquidity at the start of the banking/business day.
He added the submission of reports shall commence one year and six months from the date of effectivity of the circular.