Regulatory Alerts2026-03-27
Added · Updated
Observations and Feedback on Liquidity and Funding in Resolution Implementation
The Hong Kong Monetary Authority issued feedback on the Liquidity and Funding in Resolution test, noting that while participating Authorized Institutions generally provided required data, significant variations existed in scenario design, granularity, and completeness. The regulator highlighted critical challenges in modeling deposit run-off dynamics, contingent liquidity costs, and collateral mobilization, urging banks to refine assumptions regarding fast-moving runs and post-resolution stabilization. To address widespread data limitations and reporting gaps, the HKMA expects all relevant institutions to enhance their data architecture, automate workflows, and align with LFIR-1 expectations through bilateral engagement and continued testing.