Regulatory Alerts2014-10-29
D8/2014: Matters Related to Compliance with the Liquidity Coverage Ratio (LCR)
The South African Reserve Bank’s Office of the Registrar of Banks issued Directive 8/2014 to mandate daily monitoring and reporting of the Liquidity Coverage Ratio (LCR) by all regulated banks ahead of its January 2015 implementation. The directive establishes a phased minimum requirement scaling from 60 percent in 2015 to 100 percent by 2019, requiring institutions to maintain sufficient unencumbered high-quality liquid assets to withstand a 30-day stress scenario. Banks must immediately notify the regulator of approaching shortfalls, submit detailed liquidity assessments upon non-compliance, and may apply for interim condonation if daily calculations are operationally unfeasible.
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