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Advanced Search About the Fed News & Events Monetary Policy Supervision & Regulation Payment Systems Economic Research Data Consumers & Communities Board of Governors of the Federal Reserve System The Federal Reserve, the central bank of the United States, provides the nation with a safe, flexible, and stable monetary and financial system. Home > News & Events > Press Releases Joint Press Release March 17, 2010 Federal Banking Agencies Issue Policy Statement on Funding and Liquidity Risk Management Board of Governors of the Federal Reserve System Conference of State Bank Supervisors Federal Deposit Insurance Corporation National Credit Union Administration Office of the Comptroller of the Currency Office of Thrift Supervision For immediate release Share The federal banking agencies,1 in conjunction with the Conference of State Bank Supervisors (CSBS), released a policy statement today on their expectations for sound funding and liquidity risk management practices. This policy statement, adopted by each of the agencies, summarizes the principles of sound liquidity risk management issued previously and, when appropriate, supplements them with the "Principles for Sound Liquidity Risk Management and Supervision" issued in September 2008 by the Basel Committee on Banking Supervision. Given the recent market turmoil, the agencies are reiterating the importance of effective liquidity risk management for the safety and soundness of financial institutions. This policy statement 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 as primary tools for measuring and managing liquidity risk. The agencies expect each financial institution to manage funding and liquidity risk using processes and systems that are commensurate with the institution's complexity, risk profile, and scope of operations. Federal Register notice: HTML | 91 KB PDF Media Contacts: Federal Reserve Board FDIC NCUA OCC OTS CSBS Barbara Hagenbaugh 202-4522955 202-898David Barr 6992 703-518Cherie Umbel 6337 202-874Dean DeBuck 5770 202-906William Ruberry 6677 202-728Catherine Woody 5733 1. The federal banking agencies are the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision. Return to text Last Update: March 17, 2010 BOARD OF GOVERNORS of the FEDERAL RESERVE SYSTEM About the Fed News & Events Monetary Policy Supervision & Regulation Payment Systems Economic Research Data Consumers & Communities TOOLS AND INFORMATION Contact Publications Freedom of Information (FOIA) Office of Inspector General Budget & Performance | Audit No FEAR Act Español Website Policies | Privacy Program STAY CONNECTED Financial Stability Accessibility BOARD OF GOVERNORS of the FEDERAL RESERVE SYSTEM 20th Street and Constitution Avenue N.W., Washington, DC 20551
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