European Banking Authority Consults On Draft Regulatory Technical Standards For Additional Criteria For Preferential Treatment For Intragroup Liquidity
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On November 18, 2015, the European Banking Authority launched a
consultation on draft Regulatory Technical Standards to specify
additional criteria for preferential treatment in calculating the
Liquidity Coverage Requirement for cross-border intragroup
liquidity flows, as required under the Capital Requirements
Regulation. The CRR observes that there can at times be a need for
intra-group financial support in a case where an institution
experiences liquidity difficulties and finds itself under
conditions of stress. The draft RTS, amongst other things, specify
how liquidity providers and receivers can display a low liquidity
risk profile, by for example, a liquidity provider monitoring the
liquidity position of the receiver on a daily basis. The draft RTS
also detail the binding agreements and commitments that are
required for credit and liquidity between group entities. Comments
on the consultation are due by January 13, 2016.
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