Related provisions for BIPRU 12.4.16
1 - 9 of 9 items.
(1) A firm should ensure that the results of its stress tests are:(a) reviewed by its senior managers;(b) reported to that firm'sgoverning body, specifically highlighting any vulnerabilities identified and proposing appropriate remedial action;(c) reflected in the processes, strategies and systems established in accordance with BIPRU 12.3.4R;(d) used to develop effective contingency funding plans;(e) integrated into that firm's business planning process and day-to-day risk management;
A contingency funding plan sets out a firm's strategies for addressing liquidity shortfalls in emergency situations. Its aim should be to ensure that, in each of the stresses required by BIPRU 12.4.1R, it would still have sufficient liquidity resources to ensure that it can meet its liabilities as they fall due.
A firm must ensure that its contingency funding plan:(1) outlines strategies, policies and plans to manage a range of stresses;(2) establishes a clear allocation of roles and clear lines of management responsibility;(3) is formally documented;(4) includes clear invocation and escalation procedures;(5) is regularly tested and updated to ensure that it remains operationally robust;(6) outlines how that firm will meet time-critical payments on an intra-day basis in circumstances
(1) In designing a contingency funding plan a firm should ensure that it takes into account:(a) the impact of stressed market conditions on its ability to sell or securitise assets;(b) the impact of extensive or complete loss of typically available market funding options;(c) the financial, reputational and any other additional consequences for that firm arising from the execution of the contingency funding plan itself; (d) its ability to transfer liquid assets having regard to
A firm should ensure that its contingency funding plan takes into account the terms and conditions of any central bank liquidity facilities to which it has access, including both facilities that form part of normal liquidity management operations and emergency liquidity assistance on a secured basis. Where a firm includes in its contingency funding plan the use of central bank liquidity facilities it should consider the nature of those facilities, collateral eligibility, haircuts
(1) A firm must have in place contingency funding plans setting out adequate strategies and proper implementation measures in order to address potential liquidity shortfalls. (2) The contingency funding plans must be: (a) in writing;(b) approved by the firm'sgoverning body;(c) regularly tested; and(d) updated on the basis of the outcome of the stress tests, testing alternative scenarios set out in MIPRU 4.2D.8 R.
A contingency funding plan sets out a firm's strategies for managing liquidity shortfalls in emergency situations. Its aim should be to ensure that, in each of the stresses set out in MIPRU 4.2D.11 G, it would have sufficient liquidity resources to ensure that it can meet its liabilities as they fall due.
As soon as a firm becomes aware of the occurrence or expected occurrence1 of the events identified in BIPRU 12.9.14 R, it must immediately provide to the appropriate regulator:111(1) notification in writing of the event;11(2) an adequately reasoned explanation for the event; and11(3) an indication of the management actions the firm has taken to date to address the event, including actions from its contingency funding plan.11
In modifying the overall liquidity adequacy rule by means of an intra-group liquidity modification, the appropriate regulator may also modify the stress testing and contingency funding planrules in BIPRU 12.4 such that an applicant firm may achieve compliance with those rules by its parent undertaking conducting group-wide stress testing and preparing a group-wide contingency funding plan which gives adequate recognition to the position of the applicant firm.
BIPRU 12.4 contains further rules and guidance on stress testing and contingency funding plans. These are both extensions of the overarching systems and controls provisions in BIPRU 12.3. In formulating the rules and guidance in these two sections, the appropriate regulator has taken account of the Principles for Sound Liquidity Management and Supervision dated September 2008 issued by the Basel Committee on Banking Supervision. It is intended that the content of BIPRU 12.3 and
In carrying out the liquidity stresses required by BIPRU 12.5.6R, a firm must:(1) analyse each of the sources of risk identified in BIPRU 12.5.14R;(2) record the evidence which supports any behavioural assumptions that it makes in carrying out those stress tests;(3) record the evidence which supports its assessment of the adequacy of its liquid assets buffer; and(4) identify those of the measures set out in its contingency funding plan that it would implement.
A firm should use the results of its stress testing and scenario analysis not only to assess capital needs, but also to decide if measures should be put in place to minimise the adverse effect on the firm if the risk covered by the stress or scenario test actually materialises. Such measures might be a contingency plan or might be more concrete risk mitigation steps.