Regulatory Alerts2026-05-01
Added · Updated
Bank of Papua New Guinea Endorses Emergency Liquidity Assistance Policy Framework
The Bank of Papua New Guinea has established a principles-based policy framework governing its discretionary Emergency Liquidity Assistance (ELA) facility under the Lender of Last Resort mandate. The framework mandates that ELA will only be extended to solvent commercial banks that have exhausted all other funding sources, requiring fully secured loans backed by adequate collateral, priced above market rates, and strictly limited to a maximum twelve-month duration. Prioritizing systemic financial stability over individual institution protection, the policy imposes rigorous daily liquidity monitoring, ongoing supervisory oversight, and mandatory remedial conditions, while stipulating that government guarantees are required if the central bank’s solvency or collateral adequacy cannot be reasonably assured.