Media Releases
Published Date: 19 May 2006

MAS Invites Comments on Enhancements to Liquidity Risk Supervision Framework

Singapore, 19 May 2006...The Monetary Authority of Singapore (MAS) today released a consultation paper on the proposed enhancements to the liquidity risk supervision framework.

2   The current liquidity risk supervision framework, as articulated in MAS Notice 613, has been in place since 2001.  The framework allows banks to adopt a general methodology or risk-sensitive methodology to determine regulatory liquidity reserves depending on their level of sophistication.  While it has worked well, certain aspects of the framework could be fine-tuned. 

3   MAS is therefore proposing changes to the minimum regulatory liquidity requirements.  These changes include a revised set of 'Qualifying Liabilities' to replace 'Liabilities Base' , an expanded range of eligible liquid assets, a revised computation formula and maintenance period, and a revised Tier 1 requirement.  In addition, to ensure that banks will be better able to manage liquidity stress situations on a timely basis, the process for drawing down of regulatory reserves will be streamlined.

4   MAS invites comments on the consultation paper which can be found on the MAS website [Click here to view the consultation paper (161.5 KB) ].  Comments may be submitted to by 30 June 2006.