Amended Regulation Concerning Emergency Liquidity Assistance (ELA)

THE
GAZETTE
LIBERIA OFFICIAL
PUBLISHED BY AUTHORITY
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!.I vol. xxv MONDAY SEPTEMBER 2A25 NO. 65
THE GOVERNMENT OF THE REPUBLIC OF LIBERIA ANNOUNCES THAT THE CENTRAL BANK OF LIBERIA (CBL), PURSUANT TO ITS MANDATE UNDER THE AMENDMENT AND RESTATEMENT OF THE ACT ESTABLISHING THE CENTRAL BANK OF LIBERIA (CBL) 2O2O AND tTS AUTHORITY UNDER THE FINANCIAL INSTITUNONS ACT (FIA) OF 1999, AND SPECIFICALLY CONSISTENT WITH SECTION 37 OF THE SAID AMENDED AND RESTATED CENTML BANK OF LIBERIA ACT OF 2O2O AND SECNON 39 OF THE FINANCIAL INSTTruTIONS ACT OF 1999, HAS ISSUED ON MONDAY, SEPTEMBER 8, 2025, ITS REGULANON NO. cBuRsD lwu202s HEREIN UNDER:
Af"IENDED REGULATION CONCERNING EM ERGENCY uQUrDrrY ASSISTANCE (El-A) BY ORDER OF THE PRESIDENT l,l!,|E. SARA BEYSOLOW NYANTI II{INISTER OF FOREIGN AFFAIRS TUIINISTRY OF FOREIGN AFFAIRS MONRO\TIA, LIBERH SEPTEMBER 8, 2025 EXTRAORDINARY

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Introdu$Jiqn
The Central Bank of Liberia, pursuant to its authority under Section 39 of the New Financial Institutions Act of 1999 and Section 37 of the Amendment and Restatement of the Act Establishing the Central Bank of Liberia (CBL) 7020 hereby issues these Regulations.
1.0 Title
T'hese Regulations shall be cited as ouAmended Regulotion Concerning Emergency Liq uidity Ass istance" Regulatio n N o. C B L/ RS D/00 I / 2 A 2 5. =l
2.0 Scope
=l "The Central Bank of Liberia (CBL) shall, at its discretion, provide Emergency Liquidity =f Assistance in Liberian dollar pursuant to its lender of last resort function to licensed bank-financial institutions who are eligible under Section 3.0 of this Regulation". =l =f Where there are circumstances that the CBL may consider extreme, the CBL may grant liquidity support to a licensed bank-financial institution in foreign cumency on the terms I and conditions of this regulation. :I 3.Ollefinition
3.1 Emergency Liquidity Assistance (ELA) means the provision by the Central Bank of Liberia
A (CBL), on the basis of Section 37 of the CBL Act, ofl I a) Central Bank's money and./or A b) any other assisrance thar may lead to an increase in Central Bank's money to a solvent, viable, bank-financial institution that is facing temporary liquidity problems, without =I such an operation being part of CBL's monetary policy. =I 3.2 The CBL shall mean the Central Bank of Liberia- =I a =r 34il,ffx;i:ffiTJi:il'#ff1[,Tfi['$::H".T:['J,ffiffi*:f =t within 180 days. =l 3.5 Viability - A bank-financial institution is considered viable if its business model is ;1 sustainable, and it can generate sufficient profitability to avoid a need for repeated recapitalizations. , , a =t =I
3.3 Bank Financial Institution shall mean all licensed bank-financial institutions in Liberia.
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5.0
4.0 Obiective
The objective of this regulation is to preserve financial stability and the confidence of depositors and creditors in the Liberian banking system. Decision Making The final decision regarding the provision of ELA is made by the Central Bank's Executive Management/ Approval Committee comprising of the Executive Covernor, the Deputy Covernor for Economic Policy and the Deputy Governors for Operations, based on the technical assessment prepared by the CBL credit committee.
6.0 Eligibility Criteria
6.1 Only bank-financial institutions are eligible for ELA.
6.2Ln order to be eligible for an ELA, the CBL shall ensure that:- a) the potential failure of a bank-financial institution in need of support is judged to be a threat to systemic stability of the financial system; b) the bank-financial institution receiving support shall be assessed to be solvent and viable based on a report by the Regulation and Supervision Departmenq and that there should be a feasible exit strategy from the ELA- that is, the ELA would be a temporary bridge to a stable state in which the ELA would be repaid to the CBL. c) the bank-financial institutions shall submit a funding plan detailing the corrective actions envisaged; 0 an ELA agreement is signed between the requesting bank-financial institution and the CBL; and where necessary the Government of Liberia.
7.0 Maturity and Time Limit
7.1 The ELA shall have a time limit of 9l business days that may be renewed following
an explicit decision by the CBL for another period not exceeding (91) business days.
7.2 Each ELA envelope in LRD shall be granted for a maxirnum of l5 days. Within the 1S-day
limit, the ELA is, as a rule, carried out for the overnight period, and may be adjusted daily according to the evolution of liquidity needs. After the end of the l5-day period, the CBL rnay decide to renew or review the maximum amount of the operation, based on the estimated liquidity needs and provided that the conditions legally defined for access to the ELA continue to be met. The overnight maturity is automatically renewable, and the l5-day period for the authorization of a maximum ELA envelope in Liberian dollar by the CBL ensures a more precise calibration of ELA loans, based on shortterm liquidity forecasts, and reduces the risk of an overestimation of the ELA envelope, which would put the central bank's balance sheet at risk and induce moral hazard.

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7.3 EachELA envelope in USD shall be granted for a maximum of 7 days. Within the 7 days limit,
the ELA is, as a rule, carried out for the overnight period, and may be adjusted daily according to the evolution of liquidity needs. After the end of the 7-day period, the CBL may decide to renew or review the maximum amount of the operation, based on the estimated liquidity needs and provided that the conditions legally defined for access to the ELA continue to be met. The overnight maturity is automatically renewable, and the 7-day period for the authorization of a maximum ELA envelope in United States dollar by the CB[, ensures a more precise calibration of ELA loans, based on short-term liquidity forecasts, and reduces the risk of an overestimation of the ELA envelope, which would put the cennal bank's balance sheet at risk and induce moralhazard. 8 Conditionality
8.1 Before an ELA can be provided, the beneficiar-r,bank-financial institution shall sign an ELA
Agreement with the CBL. This ELA agreement shall be legally binding and engages the beneficiary bank-financial institution's highest authorities.
8.2 Obligation to submit more frequent information. such as:"
a) daily liquidiry- report, b) rveekly recover)" report￾c) rveekll' expensereporl d) *'eekly capital position. e) u'eekl1" income statement, and 0 other reports as may be required by the CBL.
8.3 During the ELA period, the CBL may impose amongst others, the following conditionalities:-
a) Suspension of dividend distributions and debt or share buybacks; q) Explicit Pre-approval procedure for new significant investments; c) Institute measures to limit the provision of new loans (e.g. through Iimits, prior notification, or prior approval procedures); d) Set-up specialized recovery team, inclusive of loan officers that extended loans that are non￾performing; e) No bonuses, or salary increases; 0 No payment of fees to foreign parent bank; g) Sale ofnon-core assets; h) Commitment to put in measures to stabilize deposits and restore market access; i) Commitment to put in measures to strengthen capital adequaey (e.g., recapitalization); j) Obligation to carry out asset quality reviews and external audits at the request of the CBL, at the beneficiary bank-financial institution's expense, and to submit findings to CBL.
8.4 In acldition to the conditionalities above, bank-financial institutions receiving ELA shall have
no access to CBL Bills, Standing Deposit Facility (SDf), and shall be prevented from lending in the interbank market.
8.5 Bank-financial institutions applying for ELA in USD in addition to meeting the conditionalities
in Section 8.5, shall subject itself to intrusivelenhance supervision (i.e., intensified relative to

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I regular supervisory activity), far-reaching conditionality (e.9., suspension of dividends and bonuses, restrictions on new lending and investments) and strict monitoring on the use of USD funds. ELA in USD shall not be a substitute for a lack of intragroup funding for subsidiaries of tbreign banks. 9 Funding Plan
9.1 A bank-financial insitution under ELA will be required to submit a credible funding plan
outlining the rernedial actions it will take in the near term to retum to a sound liquidity situation. The funding plan shall b€ submitted monthly for the full duration of the ELA. 10 Applicatioa Procednre l0.l In order to be granted an ELA, CBL hereby sets forth the following requirements for bank￾financial inginrtion:
10.2 A Letter of Application to the Executive Governor of the CBL expressing the desire to be
granted emergency I iqu idity assistance.
10.3 The Letter of Application shall be accompanid by funding plan, collateral being proffered,
current financial statements, board resolution to request for the ELA, and a completed application form for ELA assistance. rI 10.4 The application shall be reviewed and analyzed by the credit committee in keeping with E the provisions of this regulation. The credit committee shall make recommendations to the =l ELA approval committee based on technical assessment. =I 10.5 The approval committee, comprising of the Executive Governor and the two Deputy =f Governors, shall approve or deny the ELA request. =l 11 Assets EligibilitY Criteria The CBL may accept all assets that may be legally eligible as collateral as set out in the =l Collateral Eligibility Framework. =l 12 Cottateralization =l l2.l All ELA requested by bank-financial institutions shall be collateralized or guarantped by the Government of Liberia. =l a I I =r
12.2 The bank financial institution requesting ELA shall provide the CBL with a detailed, up￾to-date list of its unencumbered assets. CBL shall make a determination on the assets that
would be mobilized as ELA collateral and inform the requesting bank financial institution accordingly. 5

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123 The CBL shall apply appropriate risk control measures including haircuts, overcollateralization, and concentration limits, without detailing them (they should remain confidential). l3 Interest Rate
13.1 The LRD interest rate for ELA set in Liberian dollar shall be fixed at 200 basis points over
the standing credit facility.
13.2 The interest rate for ELA in USD shall be the higher of the Secured Ovemight Financing
Rate (SOFR) plus a spread of 400 bps or the cost of the CBL sovereign's cost of sourcing t.lSD: ius$f[.e * tn&x {SOfiR + 400 bps; CBL's cost of USD funding} This rate shall be reviewed annually, considering sovereign honowing rates in USD' 14 Government Role ELA shall be extended where necessary, to preserve financial stability, only with a government guarantee (as complement, rather than substitute, of collateral, and of credible action to rostore solvency, outside or within resolution) in the three following situations:
If there is significant uncertainty on solvency, ELA may be considered only under a government guarantee. Although forward looking solvency is a condition for ELA, in certain cases where there is significant uncertainty of the bank's solvency, the bank may also be allowed to receive ELA, provided there is a government indemnity on the central bank's ELA loan, as complement: (i) collateral; and (ii) a credible action to address the temporary undercapitalization. In such circumstances, ELA must not be provided without all efforts to fully collateralize ELA and a detailed plan to recapitalize the bank (e.g., a time-specifrc and credible commitment to recapitalize the bank by its existing shareholders or new investors, or a commitment by the State to recapitalize the bankFi.e., a government guarantee (or indemnity) should not be considered suffrcient to provide ELA. Furtherrnore, if the bank is clearly insolvent, i.e., there is no credible recapitalization plan, ELA shall not be provided. If there is insufficient collateral, ELA may be considered with a government guarantee to fill the collateral gap. Also in this scenario, collateral must be mobilized as much as pclssible (with sound risk control measures) to mitigate the financial risk for the State. Furthermore, a credible recapitali zation plan would also be probably envisioned under this scenario, as insufficient collateral to cover ELA is likely to be reflective of fragile solvency. If there is no credible plan to recapitalize the bank, ELA shall not be provided. I =t I =l =t =l =I =T =l =l =I =I I =l =t f, (i) (ii)

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(iii) In case of an ongoing resolution leading to the emergence of a solvent, viable bank in the near term, ELA may be envisioned (funding-in-resolution). However, if the CBL has concems about the exit strategy, ELA should only be provided for funding-in￾resolution under a government guarantee. Also in this scenario, all efforts must be made by the central bank to obtain sufficient collateral from the bank to cover the ELA envelope, thereby limiting the State's financial exposurs. Government guarantee should be considered as a second layer of protection for the central bank and as a complement, rather than a substitute, of collateral. As in a non-resolution scenario, a credible prospect for the bank to retum to solvency and viability is a requirement for ELA. If rhere are concerns about the exit strategy, a government guarantee would be required. For instance, in a good bank/had bank separation, only the good bank may be eligible to ELA, while the bad bank should not receive any ELA. In case of bank liquidation, ELA must not be provided (regardless of the existence of a government guarantee). 15 Information Sharing and Coordination The Cenral Bank of Liberia (CBL) shall collaborate with the Ministry of Finance and Development Planning (MFDP) to develop aMemorandum ofUnderstanding (MoU) outlining the framew'ork for information exchange, necessary safeguards, and the conditions under which a governmenr guarantee may be required in Emergency Liquidity Assistance (ELA) situations. The primary objective of the MoU is to ensure sufficient clarity on the status of the bank financial institution -particularly its solvency, viability, available collateral, and regulatory compliance-*' enabling the MFDP to make an informed decision regarding the provision of a potential government guarantee. The MoU shall explicitly affirm that the CBL's operational and decision￾making independence must be preserved at all times throughout the ELA assessment and approval process. 16 Powers of,CFL The CBL has full discretion in:
a) assessing the risks to financial stability and the resulting decision to provide, or not, ELA to a financial institution. b) assessing, in a forward-looking manner? the solvency, viability and systemic nature of a financial irrstitution requesting ELA. c) deciding on the financial terms of ELA; and d) selecting assets as guarantees and applying appropriate risk control measures. e) terminating the ELA where it is adjudged that the benet'iciary licensed bank-financial institution no longer meets the eligibility criteria or conditions setforth in this regulation 7

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17 Eficcth-e Dete
This regulation shatltake effect immediately upon publication in Official Gazette and shall remain in force until otherwise advised by the Central Bank of Liheria. ls$€d rhb )O(o day of XXX 2025 inthe City of Monrovia, Republic of Liberia. BY ORDER OF THE PRESIDENT SARA BEYSLOW NYANTI MINISTER OT' FORAIGN ATFAIRS MINISMY OF FOREIGN AIIFAIRS MONROVIALTBf,RIA 8

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Snprpln Tnuplaru LnmnR RrQunsnNc ELA
[DArE]
[Address at CBL].
Dear Executive Governor,
[Counterparty] is currently solvent but is experiencing liquidity pressures that pose an immediate threat to its ability to make payments to customers and the public. Accordingly, I hereby request emergency liquidity assistance from the Central Bank of Liberia (CBL) by advancing funds to [Counterparty], in accordance with the Central Bank's authority under statute and on the terms and conditions that may be set by the CBL. I would like to request that an amount of up to X million (LR$) and X million (US$) be advanced. Yours sincerely, Chairman E, Er H fr -.tl Er tr Ir FI ETt t T il F Er T IIirilIII iltrI t ! Er t h h i

ArpuNorx II. Appr,rcairr* l.o non ELA
l. \ame and address of applicant:
:. \ame and title of authorized representative:
3- Signature of authorized representative:
(Ite person signing the request must be one of the authorized representatives included in the CBL's authorized pcrson's list).
4. Type of liquidity assistance requested:
i) Collateral offered
Description Book Yalue Market Val.-US MryriE ii) Documents attached:
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Amount (LR$ Million and/or
US$ Million):
Transaction date:
Seftlement date:
Maturity date:
Term:
I. For domestic securities offered ur .oi
Central Registry of the Central Treasury.
2. A copl'of the decision of the applicant's Board of Directors signed by the Chairman and
the Chief Executive Officer verifying that the Board has conclu4ed that the institution is solvent.
3. A copy of the latest financial statements of the institution.
4' A statement signed by the Chief Exocutive Officer on the reasons why the institution has been unable to meet its liquidity needs from market sources. 5' If the applicant bank is a foreign institution, a formal statement from its parent explains why the parent is unable to provide fur the applicant,s liquidity needs. ,t t ne applicant is also obliged to provide a remedial program, /bi,; rwrrrat ,"d i" a frrmat agreed by the cBL, in relotion to restoring its tiquidi$t pisition. l0