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OCC Bulletin 2023-25 | July 28, 2023

Liquidity: Addendum to the Interagency Policy Statement on Funding and Liquidity Risk Management

To

Chief Executive Officers of All National Banks, Federal Savings Associations, and Federal Branches and Agencies; Department and Division Heads; All Examining Personnel; and Other Interested Parties

Summary

The Office of the Comptroller of the Currency (OCC), Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, and National Credit Union Administration (collectively, the agencies1) are issuing an addendum to the “Interagency Policy Statement on Funding and Liquidity Risk Management” issued March 22, 2010. The addendum reminds banks2 of the importance of maintaining, assessing, and testing their contingency funding plans as part of their liquidity risk management program and activities.

Note for Community Banks

This addendum applies to community banks.

Highlights

The events of the first half of 2023 have further underscored the importance of liquidity risk management and contingency funding planning. The addendum highlights the importance of contingency funding plans to promote the availability of adequate sources of funding in times of stress, including that banks

  • assess the stability of their funding and maintain a broad range of funding sources that can be accessed in adverse circumstances.
  • ensure that they have access to a range of contingent sources of funding, especially when some contingency lines may be unavailable in times of idiosyncratic or market stress.
  • review and revise contingency funding plans periodically, and more frequently as market conditions or strategic initiatives change.
  • understand requirements and maintain operational readiness to borrow from federal funding facilities, such as the Federal Reserve discount window, if these facilities are part of their contingency funding plans.

Further Information

Please contact the Treasury and Market Risk Policy Division at (202) 649-6360.

 

Grovetta N. Gardineer
Senior Deputy Comptroller for Bank Supervision Policy

Related Links

1 The federal financial regulatory agencies are the OCC, the Board of Governors of the Federal Reserve System, the Consumer Financial Protection Bureau, the Federal Deposit Insurance Corporation, and the National Credit Union Administration.

2 “Banks” refers collectively to national banks, federal savings associations, and federal branches and agencies of foreign banking organizations.

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