Regulatory Alerts2026-01-07
Added · Updated
Liquidity Risk Management - Sound LRM framework
The Hong Kong Monetary Authority issued this circular to share good industry practices on liquidity risk management following recent supervisory reviews and lessons from the 2023 US and European banking turmoil. The guidance highlights three critical areas for Authorized Institutions: enhancing liquidity stress-testing frameworks to account for digital amplification, maintaining robust contingency funding plans with sufficient liquidity cushions, and leveraging advanced technology for real-time monitoring. Institutions are expected to review and strengthen their risk management systems and controls in accordance with these supervisory expectations to ensure resilience against emerging liquidity shocks.
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