82. Competent authorities should review the submitted information in particular as set out in …

Competent authorities should review the submitted information in particular as set out in Article 4, letter a) n. (v)²² of the RTS on information for authorisation , with the aim of assessing the overall preparedness of the internal liquidity adequacy assessment process, having regard, for instance, to the following aspects:

• (a) liquidity governance. Competent authorities should gain a clear understanding of the effective capacity of the institution to manage its liquidity, including whether the respective functions have sufficient resources to ensure sound liquidity management and are able to compute the NSFR and LCR. Competent authorities should also gain a clear understanding of the reporting lines set up to discuss the institution’s liquidity and related risks, including the intended content and frequency of reports to the management body, senior management and relevant committees (if applicable) in order to establish that they can discuss and challenge the relevant matters;
• (b) the funding strategy and liquidity planning. Competent authorities should gain a clear understanding of the capacity of the credit institution to design scenarios, including stress testing and contingency funding plans;
• (c) the liquidity internal controls framework. Competent authorities should gain a clear understanding of the envisaged processes of reviewing, validating and substantiating with evidence (e.g. reports, control evidence).

²² Article 4, letter (h) of the RTS on information for authorisation provides ‘The application shall set out all of the following on the financial situation of the applicant credit institution: […] a summary of the internal liquidity adequacy assessment, at consolidated, sub-consolidated and individual levels as applicable, demonstrating that the credit institution’s liquidity resources will be adequate to meet its individual liquidity requirements; […]’.

1. Overview

1.1 References

1.2 Identified Requirements

1.3 Related Standards

2. Identified Requirements

3. Related Standards

• EBA - Published by the European Banking Authority at https://www.eba.europa.eu/