Today, federal regulatory agencies for financial institutions have updated their existing guidance on managing liquidity risks and contingency planning. The new guidance emphasizes the importance of depository institutions regularly evaluating and revising their contingency funding plans.
In light of this update, depository institutions are encouraged to include the discount window as part of their contingency funding plans. It is expected that if the discount window is incorporated, the institution should be prepared to utilize it by establishing and maintaining operational readiness, including periodic transactions.
Depository institutions can readily obtain funding through the discount window, while credit unions can do so through the Central Liquidity Facility. It is important to note that this guidance applies to all depository institutions supervised by the regulatory agencies.
For additional information, please refer to the Addendum to the Interagency Policy Statement on Funding and Liquidity Risk Management: Importance of Contingency Funding Plans (PDF). Media contacts for the respective federal agencies are listed below:
– FDIC: LaJuan Williams-Young – (202) 898-3876
– Federal Reserve: Eric Kollig – (202) 452-2955
– NCUA: Joseph Adamoli – (703) 518-6572
– OCC: Stephanie Collins – (202) 649-6870
Read the original Federal Reserve release here.
