Principles for Sound Liquidity Risk Management and Supervision
The principles underscore the importance of establishing a robust liquidity risk management framework that is well integrated into the bank-wide risk management process. Key elements of a bank's governance of its liquidity risk management are emphasised. The document also sets out the principles to strengthen the measurement and management of their liquidity risk. Guidance for supervisors has been augmented substantially too. The guidance focuses on liquidity risk management at medium and large complex banks, but the sound principles have broad applicability to all types of banks. The implementation of the sound principles by both banks and supervisors should be tailored to the size, nature of business and complexity of a bank's activities. A bank and its supervisors also should consider the bank's role in the financial sectors of the jurisdictions in which it operates and the bank's systemic importance in those financial sectors. The Basel Committee fully expects banks and national supervisors to implement the revised principles promptly and thoroughly and the Committee will actively review progress in implementation.