Rule · MFSA · 20 Oct 2015

Circular to Credit Institutions on the treatment of central bank reserves with regards to the Liquidity Coverage Requirement (LCR)

The Malta Financial Services Authority confirms that withdrawable central bank reserves are recognized as Level 1 assets when calculating the Liquidity Coverage Requirement (LCR) for credit institutions. This treatment aligns with a common understanding reached by the European Central Bank and National Competent Authorities under Article 416 (1) (a) of Regulation (EU) No 575/2013 and Article 10 (1) (b) (iii) of Commission Delegated Regulation (EU) 2015/61. The procedure applies to the calculation of the LCR for the reporting period starting on 1 October 2015.

MaltaMalta Financial Services Authority

Circular to Credit Institutions on the treatment of central bank reserves with regards to the Liquidity Coverage Requirement (LCR) The European Central Bank (ECB) and National Competent Authorities (inter alia MFSA), have reached a common understanding on the recognition of withdrawable central bank reserves as Level 1 assets when calculating the LCR in accordance with the Commission Delegated Regulation (EU) 2015/61. This understanding has emanated from Article 416 (1) (a) of the Regulation (EU) No 575/2013 and Article 10 (1) (b) (iii) of the Commission Delegated Regulation (EU) 2015/61 of 10 October 2014. The ECB publication can be accessed through the following link. This development was also communicated by the Central Bank of Malta through a financial stability notification. The procedure described in this ECB publication shall apply to the calculation of the LCR DA as of 1 October 2015. Communications Unit Malta Financial Services Authority 20th October 2015

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