7.1 Information on liquidity and funding risk management framework

On evidencing the set-up of a process that ensures the institution has a robust and specific framework for liquidity and funding risk management, including a process for identifying, measuring and controlling liquidity and funding risks, competent authorities should ensure that they receive from institutions the following:

• a. description of the scope of ILAAP including an overview of and reasoning for any deviations from the prudential scope of liquidity requirements recognising possible waivers;
• b. description of the set-up of ILAAP explaining the relation between all its components and providing reasoning about how that set-up ensures the institution has access to sufficient liquidity;
• c. the criteria applied by the institution for the selection of significant risk drivers for liquidity and funding risk, including the selection of significant currencies for monitoring the liquidity and the funding position;
• d. the criteria applied by the institution for the selection of appropriate tools and assumptions for ILAAP, such as the method of measuring and projecting current and future cash-flows of assets, liabilities and off-balance-sheet items over appropriate time horizons.

7.1.2 Operational documentation

On evidencing the full implementation of a process that ensures the institution has a robust and specific framework for liquidity and funding risk management, including a process for identifying measuring and controlling liquidity and funding risks, competent authorities should ensure that they receive from institutions the following:

• a. an assessment of the intragroup liquidity flows and funding positions, including any possible legal or regulatory impediments to the transfer of liquidity within the (sub-)group;
• b. reasoning for the selection of the significant risk drivers and a quantitative overview of these risk drivers, updated at an appropriate frequency;
• c. quantitative overview of the funding profile and its perceived stability in all significant currencies;
• d. evidence of the monitoring of compliance with minimum and additional prudential requirements related to liquidity and funding risk in accordance with Article 105 of Directive 2013/36/EU, including the forecast of compliance with these requirements under different scenarios over an appropriate time horizon within the scope of ILAAP coverage.