Regulatory Alerts2022-01-01
Prudential Standard 02-2022/BSD on Implementing the Liquidity Coverage Ratio
The Reserve Bank of Zimbabwe’s Bank Supervision Division issued Prudential Standard 02-2022/BSD to require all licensed banking institutions maintain a minimum Liquidity Coverage Ratio that guarantees 30-day survival during combined idiosyncratic and market-wide stress scenarios. The standard defines High Quality Liquid Assets across Level 1, 2A, and 2B categories with prescribed haircuts and operational constraints, while establishing precise calculation methods for total net cash outflows driven by deposit run-offs, wholesale funding losses, and credit rating downgrades. Institutions must upgrade management information systems, conduct internal stress tests, report liquidity in a single currency, and notify the central bank or submit corrective plans when utilizing liquid buffers below the 100% threshold.