Regulatory Alerts2024-02-01
Added · Updated
HKMA Liquidity Facilities Framework for Banks: Operational Note
The document outlines the operational framework for four liquidity facilities available to licensed banks, restricted licence banks, and deposit-taking companies: Settlement Facilities, Standby Liquidity Facilities, Contingent Term Facility, and Resolution Facility. It specifies collateral eligibility and haircuts for each facility, with the Standby Liquidity Facilities collateral list updated as of 1 February 2024 to include specific haircuts for cash, government bonds, and other securities. The framework details that Settlement Facilities provide intraday or overnight HKD liquidity, while Standby Facilities offer term liquidity up to one month, with pricing and collateral haircuts determined by the HKMA. The Contingent Term and Resolution Facilities are provided at the HKMA's discretion to address specific circumstances or resolution scenarios, utilizing collateral lists that extend to residential mortgages and other loans.