44. On liquidity buffers and collateral management strategy, competent authorities should ensure …

On liquidity buffers and collateral management strategy, competent authorities should ensure that they receive from institutions the following:

a. their methodology for determining the internal minimum size of the liquidity buffer, including the institutions’ definition of liquid assets, the criteria they apply for determining the liquidity value of liquid assets and the constraints relating to concentration and other risk characteristics of the liquid assets;
b. policy document on collateral management, including principles in relation to the location and transferability of collateral as well as to their role in relation to meeting minimum prudential requirements;
c. policy document on asset encumbrance, including principles for measuring and monitoring both encumbered and unencumbered assets and linking the limit and control framework regarding asset encumbrance to the institution’s (liquidity and funding) risk appetite;
d. principles for testing the assumptions relating to the liquidity value of, and time to sell or repo, assets included in the liquid asset buffer;
e. policy document on liquidity concentration risk in the liquidity buffer, including principles for measuring and monitoring of any potential loss of available liquidity due to this concentration. 7.3.2 Operational documentation

1. Overview

Summary	Regulation

Requirements
Source	Requirement

Standards
Source	Requirement

EBA -
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