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Free to ViewFunding For Lending 100% relevant

25th July 2012

The following explanation is about The Funding for Lending Scheme. It contains the main content of the The Bank of England's Explanatory Note of 13th July 2012 together with additional comments.


Registration RequiredRegulation > Consultation Paper 09/17: A Specialist Sourcebook for Building Societies June 2009 62% relevant

1st August 2009

The general thrust of the CP is that Societies must prove that they have both the management and the systems capable of effectively dealing with the risks they face. This is part of the enhanced supervisory approach now adopted by the FSA. It states that systems and controls must match the level of complexity in a firm's business model. The FSA will adopt a more interventionist approach in order to ensure this is the case. The proposal is that building societies and the regulator will determine whether the risk management policies adopted are appropriate. Where they are not the Society can either simplify its business or improve its risk management. The FSA also intends to limit societies diversifying their business without a full assessment of capital adequacy. The FSA has considered applying similar CP 17 guidance to the banking sector but has decided on account of the "lack of homogeneity" that this would not be practical and in their case a firm-by-firm approach is more appropriate. The CP addresses treasury and lending. It contains five approaches to treasury management, three areas of treasury guidance and three approaches to lending. Consultation closes on 5th September 2009 with implementation due in early 2010 when a new Building Societies Sourcebook (BSOCS) will replace IPRU-BSOC.


Registration RequiredNet stable funding ratio 41% relevant

25th March 2017

The NSFR requires banks to maintain stable levels of funding relative to their assets and off-balance sheet liabilities. It is a structural ratio designed to improve both bank and systemic resilience. It is a check on rapid bank balance sheet growth and it discourages banks from holding long term illiquid assets funded through wholesale sources. It is one of two minimum standards (the other being the Liquidity Coverage Ratio which focusses on holding short term high quality assets to meet short term liquidity shocks). To back this up there are a host of liquidity monitoring tools they impose on banks via regulatory reporting.


Registration RequiredRegulation > Consultation Paper 08/22 Strengthening liquidity standards December 2008 40% relevant

31st January 2009

This CP sets out the FSA's plans to reform the liquidity regime. It requires firms to undertake a much more rigorous analysis of their liquidity position. This includes the effect of stressed conditions on their business. The firm will submit what it considers to be an appropriate liquidity buffer to the regulator. The FSA will then decide whether it is sufficient. In determining the buffer the FSA will also assess the firm's systems and management. If these are considered weak the buffer will be increased accordingly. The liquidity buffer can only be held in liquid assets. The FSA's view is that this primarily means Gilts, sovereign debt or central bank deposits. The FSA makes it clear, "The responsibility of adopting a sound approach to liquidity risk management is on firms and their senior management".


Free to ViewFunding policy - quick guide 36% relevant

30th July 2010

Building societies are expected to have an up to date funding policy statement. This will need board approval. What should your funding policy contain? NEDs may find this guide helpful.


Payment RequiredILAAP 26% relevant

25th March 2017

Firms must undertake an Internal Liquidity Adequacy Assessment Process (ILAAP). This is their assessment of the liquidity risk they face. The regulator evaluates this process and subsequently issues the Internal Liquidity Guidance (ILG). This is the level of liquid assets a firm is expected to maintain.