LM-5.1 LM-5.1 Overview
LM-5.1.1
Banks must maintain an adequate cushion of unencumbered liquid assets that can be readily sold or used as collateral in private markets by a bank to obtain funds to meet the liquidity needs at all times, even in periods of severe idiosyncratic and market stress.
August 2018LM-5.1.2
The size of the liquidity cushion should reflect a bank's established risk tolerance, and should be sufficient to meet the bank's liquidity needs in the initial phase of liquidity stress, which is most critical to the bank's survival, taking into account the monetization or borrowing values of the assets included in the cushion under the relevant stressed conditions.
August 2018LM-5.1.3
The liquidity cushion should be sized to enable a bank to continue to meet its daily payment and settlement obligations on a timely basis for the period of stress. In doing so, the bank should take into account other available tools and resources to manage intraday liquidity risks.
August 2018LM-5.1.4
In addition, the liquidity cushion must at least be sufficient to enable a bank to reach its regulatory LCR.
August 2018
