BSP approves rules on intra-day liquidity reporting

Published January 2, 2020, 12:00 AM

by manilabulletin_admin


The central bank’s Monetary Board has approved the intraday liquidity reporting guidelines for the daily monitoring of all Bangko Sentral ng Pilipinas (BSP) supervised financial institutions’ (BSFIs) liquidity requirements.

The reporting guidelines will cover the intraday liquidity of universal and commercial banks and their subsidiary thrift banks or quasi-banks. These covered BSFIs will begin the submission of the intrady liquidity report by end June 2021.

“The monitoring of intraday liquidity position provides a tool to gauge the ability of covered banks and quasi banks to meet their intraday obligations on a timely basis, ultimately contributing to the smooth and efficient functioning of the payment and settlement systems,” according to the BSP.

The BSP will be requiring an intraday liquidity metrics that are consistent with international standards such as daily maximum intraday liquidity usage, intraday throughput, gross payments sent and received, and available intraday liquidity position, among other metrics, it said.

The BSP, however, said it will not require stand-alone thrift banks and quasi-banks, as well as all rural/cooperative banks to submit an intraday liquidity report because of lower volume of payments and settlements by these BSFIs.

But these stand-alone BSFIs and the rural/cooperative banks will have to maintain what the BSP said should be an “adequate and reliable management information system” to measure and monitor selected intraday metrics.

“The submission of the report is expected to encourage covered banks/quasi-banks to adopt a systematic and disciplined approach in managing their intraday liquidity,” said the BSP. “It will also enable the BSP to conduct a detailed analysis of the resilience of the covered banks/quasi-banks to intraday liquidity shocks and monitor how intraday liquidity risk evolves over time.”

The BSP said that the guidelines “complete the BSP’s four-phased package of reforms on liquidity standards.” These include: The issuance of the Guidelines on Liquidity Risk Management (first phase); the adoption of Liquidity Coverage Ratio and the Net Stable Funding Ratio for universal and commercial banks and their subsidiary banks/quasi-banks (second phase); and the Minimum Liquidity Ratio (MLR) for stand-alone thrift, rural and cooperative banks (third phase).

“The sequencing of these liquidity standards was deliberate and cognizant of domestic conditions and the potential impact on the banking system,” said the BSP.