Regulatory Alerts2000-03-24
Prudential Regulations on Liquidity Requirements for Licensed Banks
The Central Bank of Liberia mandates that licensed banks maintain sufficient liquidity to meet expected and contingent cash flows by defining specific eligible assets, including cash, central bank balances, and short-term government securities capped at 2 percent of liabilities. The regulations establish a required 15 percent liquidity ratio, calculated as liquid assets against designated deposits and liabilities, with the Central Bank authorized to adjust this threshold between 5 and 25 percent. Licensed banks must submit weekly standardized returns detailing these figures, subject to sanctions for non-compliance under the Financial Institutions Act of 1999.
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