Regulatory Alerts2012-05-10
Provision of a committed liquidity facility and utilisation of statutory cash reserves in terms of the Basel III liquidity framework
The South African Reserve Bank has approved a committed liquidity facility and permitted statutory cash reserves to count as high-quality liquid assets to help banks meet the Basel III liquidity coverage ratio. The facility covers up to 40 percent of a bank’s stressed net cash outflows, requires unencumbered collateral such as rated debt or Top 40 equities, and imposes scaled annual commitment fees ranging from 15 to 45 basis points plus a drawdown rate of the repo rate plus 100 basis points. Implemented from 1 January 2013, this measure addresses domestic shortfalls in qualifying liquid assets and reduces banks' reliance on short-term wholesale funding during stress scenarios.
Share