BANKS: INPUT SOUGHT ON INTERNAL LIQUIDITY ADEQUACY ASSESSMENT DIRECTIVE

BANKS: INPUT SOUGHT ON INTERNAL LIQUIDITY ADEQUACY ASSESSMENT DIRECTIVE

• 10 March 2026
• Financial Sector
• SA Legal Academy

The Prudential Authority has called for comments by 30 April 2026 on a draft directive prescribing internal liquidity adequacy assessment process requirements.

‘Guided by the Basel Committee on Banking Supervision principles for sound liquidity risk management and supervision’, the requirements envisaged:

• seek to ‘ensure robust liquidity risk management through a dual framework, integrating … (a) bank’s own risk assessment with regulatory liquidity requirements’, and
• ‘mutually reinforce liquidity adequacy evaluation’, supported by:
  • ‘robust governance’
  • ‘rigorous stress testing’
  • ‘comprehensive documentation’, and
  • ‘integration with … (a bank’s) internal capital adequacy assessment process and recovery planning’.

As ‘critical input … (to) the Prudential Authority’s supervisory processes’, the intention is that banks should submit their internal liquidity adequacy assessment process documentation annually, with a ‘signed liquidity adequacy statement’.

• draft directive

Published by SA Legal Academy Policy Watch

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