355. Competent authorities should assess whether the investment firm has a strong and comprehensive …

Competent authorities should assess whether the investment firm has a strong and comprehensive control framework and sound safeguards to mitigate or limit its liquidity risk. The liquidity control framework and the safeguard mechanisms may be separated from other risks’ control frameworks or mechanisms. When assessing such frameworks and mechanisms, the competent authorities should take into account all of the following criteria:

• a. whether the limit and control framework is adequate for the investment firm’s complexity, size and business model and reflects the different material drivers of liquidity risk, such as maturity mismatches, currency mismatches, derivatives transactions, off-balance sheet items and intraday liquidity risk;
• b. whether the investment firm has implemented adequate limits and monitoring systems that are consistent with its liquidity risk appetite;
• c. whether the risk limits are regularly reviewed by the competent bodies or control function of the investment firm and clearly communicated inside the firm;
• d. whether there are clear and transparent procedures regarding how compliance with individual liquidity risk limits is monitored and how limit breaches are handled (including clear escalation and reporting procedures); and
• e. whether the limit and control framework helps the investment firm to ensure the availability of sufficient liquid assets.

1. Pārskats

1.1 Atsauces

1.2 Identificētās prasības

1.3 Saistītie standarti

2. Identificētās prasības

3. Saistītie standarti

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