Regulatory Alerts2014-10-28
D7/2014: National Discretion Related to the Liquidity Coverage Ratio
The South African Reserve Bank’s Registrar of Banks issues Directive 7/2014 to define national discretions for the liquidity coverage ratio framework. Banks may classify cash reserves and foreign-currency Level 1 assets as high-quality liquid assets, with foreign currency holdings capped at five percent of total requirements and subject to an eight percent haircut. The directive further mandates specific run-off factors for retail and term deposits, establishes clear financial hardship criteria, and assigns standardized liquidity factors to contingent funding obligations.
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