EBA · 2020_5523 Rejected question

Control of high-quality liquid assets

Name: Control of high-quality liquid assets: EBA Q&A — EU Financial Regulatory Q&A
Creator: European Banking Authority
License: https://creativecommons.org/licenses/by/4.0/

Regulation: Regulation (EU) No 575/2013 (CRR)
Article: 460, para. 1
Topic: Liquidity risk
Submitted by: Competent authority
Submitted: 2020-09-30

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Question

Does Article 8(3) LCR DR allow for a setup where certain liquidity management services such as the monetisation of high-quality liquid assets are outsourced to an external party, i.e., outside the reporting credit institution?

Background

In the concrete case, certain liquidity management services such as portfolio management and/or trading/execution, are outsourced. The outsourcing agreement is supported by a governance framework ensuring that the external party will act upon request of the credit institution at any point in time. It is to be clarified whether or not such an arrangement would be compliant with the conditions under Article 8(3) LCR DR, in particular paragraph (b).

No answer published yet.

Original source: European Banking Authority, Q&A ID 2020_5523

This Q&A is published by European Banking Authority and is non-binding. It does not constitute legal advice. Updated weekly from official ESA sources.

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