408. Competent authorities should assess whether the management framework of the institution’s …

Competent authorities should assess whether the management framework of the institution’s liquidity-specific stress testing is appropriate and whether it is properly integrated into the overall risk management strategy. They should take into account:

• a. whether the extent and frequency of stress tests are appropriate to the nature and complexity of the institution, its liquidity risk exposures and its relative importance in the financial system;
• b. whether the outcomes of stress testing are integrated into the institution’s strategic planning process for liquidity and funding and used to increase the effectiveness of liquidity management in the event of a crisis, including in the institution’s liquidity contingency and recovery plan;
• c. whether the institution has an adequate process for identifying suitable risk factors for conducting stress tests, having regard to all material vulnerabilities that can undermine the liquidity position of the particular institution;
• d. whether assumptions and scenarios are reviewed and updated sufficiently frequently;
• e. where the liquidity management of a group is being assessed, whether the institution pays adequate attention to any potential obstacles to the transfer of liquidity within the group.

Liquidity and funding risk internal control framework

1. Apžvalga

1.1 Nuorodos

1.2 Nustatyti reikalavimai

1.3 Susiję standartai

2. Nustatyti reikalavimai

3. Susiję standartai

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