Regulatory Alerts2021-10-21
Guidance on Liquidity Risk Management
Issued by the Guernsey Financial Services Commission, this guidance requires all local banks to maintain a Liquidity Coverage Ratio (LCR) of at least 100% and report the Net Stable Funding Ratio (NSFR) monthly to ensure short- and long-term liquidity resilience. Banks must implement a board-ratified Liquidity Management Policy that incorporates stress testing, contingency funding plans, and detailed maturity analysis to identify potential liquidity strains under normal and crisis conditions. The framework replaces previous maximum mismatch limits, introduces an optional Liquidity Mismatch Ratio for group-dependent institutions, and requires immediate reporting of any regulatory breaches to safeguard against systemic funding disruptions.
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