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LM-2.1.5

In addition to the above, banks should adopt other metrics, as considered prudent or necessary to supplement their liquidity risk management, such as:

(a) Medium-term funding ratio3, stable or core deposit ratio, or any similar ratio that reflects the stability of a bank's funding;
(b) Loan-to-deposit ratio, or any similar ratio that reflects the extent to which a major category of asset is funded by a major category of funding4; and
(c) Metrics tracking intragroup lending and borrowing.

3 A medium-term funding ratio is a ratio of liabilities to assets, both with a contractual maturity of, say, more than 1 year. This ratio focuses on the medium-term liquidity profile of a bank and is intended to highlight the extent to which medium-term assets are being financed by the roll-over of short-term liabilities.

4 A bank, depending on its business profile, may decide to adopt different breakdowns of the loan-to-deposit ratio such as, by way of example, loan-to-retail customers/retail customer deposits; loan to corporate customers/corporate customer deposits; loan/retail (or corporate) customer deposits. To complement the analysis provided by these indicators, the bank may consider assessing other funding risk indicators such as customer deposits/total liabilities or deposits from credit institutions/total liabilities to provide a notion of the bank's funding profile and take a closer look at the share of wholesale funding. Depending on its foreign activities and the related relevance, the bank may decide to assess the share of deposits in non-domestic markets.

August 2018