Regulatory Alerts2013-06-18
Further details on the liquidity transfer pricing systems
The German Federal Financial Supervisory Authority (BaFin) issued guidance following its June 2013 expert committee meeting to clarify requirements for liquidity transfer pricing systems under the Minimum Requirements for Risk Management (MaRisk). The document distinguishes implementation stages between smaller and larger institutions, addressing challenges in quantifying liquidity costs, allocating liquidity buffer expenses, and ensuring granular, transaction-level cost allocation to prevent silo thinking. BaFin mandates that all institutions finalize their system concepts by the end of 2013 while emphasizing that risk controlling must oversee system development to ensure independence from trading and market activities.
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