Media Releases
Published Date: 26 October 2007

MAS Invites Comments on Proposed Changes to Minimum Liquid Assets and Minimum Cash Balances Requirements for Banks

Singapore, 26 October 2007...The Monetary Authority of Singapore (MAS) has released a consultation paper on the draft notices to effect proposed changes to the Minimum Liquid Assets and Minimum Cash Balances requirements for banks.

2   In 2006 MAS consulted the industry on several proposed enhancements to the liquidity risk supervision framework.  These include a revised set of 'Qualifying Liabilities' to replace 'Liabilities Base'; an expanded range of eligible liquid assets to afford banks greater flexibility in managing their liquid assets portfolio; and a revised computation formula and maintenance period.  In addition, to ensure that banks would be better able to manage liquidity stress situations on a timely basis, we proposed streamlining the process for drawing down of regulatory reserves.  The proposed framework will continue to allow banks to adopt either a general methodology or a risk-sensitive methodology for determining regulatory liquidity reserves, depending on their level of sophistication and liquidity risk management capability. 

3   In formulating the revised framework, MAS took into consideration the feedback received from its 2006 consultation. The revised framework will be implemented via two MAS Notices – Notice 613 on Minimum Liquid Assets and Notice 758 on Minimum Cash Balances.

4   MAS invites interested parties to provide feedback on the two draft Notices, which are available on the MAS website [Click here to view the consultation paper ] (216.6 KB).  Responses to earlier feedback received are also published in this consultation paper. Respondents should forward their comments to MAS by 26 November 2007.