Liquidity Regulation
| Basic data | |
|---|---|
| Title: | Ordinance on the liquidity of institutions |
| Short title: | Liquidity Regulation |
| Abbreviation: | LiqV |
| Type: | Federal Ordinance |
| Scope: | Federal Republic of Germany |
| Issued on the basis of: | Section 11 (1) sentence 2 KWG |
| Legal matter: | Business law , banking law |
| References : | 7610-2-30 |
| Issued on: | December 14, 2006 ( BGBl. I p. 3117 ) |
| Entry into force on: | January 1, 2007 |
| Last change by: |
Art. 1 Regulation of 22 December 2017 ( Federal Law Gazette I, p. 4033 ) |
| Effective date of the last change: |
January 1, 2018 (Art. 2 of December 22, 2017) |
| Please note the note on the applicable legal version. | |
The Liquidity Regulation (LiqV) or Regulation on the Liquidity of Institutions is a regulation issued by the Federal Financial Supervisory Authority . It imposes certain obligations on credit institutions and financial services institutions with which their solvency ( liquidity ) is to be ensured at all times .
The ordinance is based on Section 11 of the German Banking Act and replaced Principle II on January 1, 2007 .
The basic idea is that an institution must have sufficient means of payment at all times in order to be able to meet its short-term payment obligations. According to § 2 LiqV, the institute has sufficient liquidity if the means of payment available within one month do not fall short of the payment obligations that become due during this period.
In the §§ 3 to 8 LiqV is defined as the amount and timing of cash and liabilities are to be determined for the various cash and off balance business types. So z. For example, it is assumed that 10% of the savings deposits are withdrawn and thus paid out within one month. The regulations in Sections 3 to 7 LiqV follow those of the previous Principle II.
What is new is the possibility created in § 10 LiqV to be able to use one's own liquidity measurement and control procedures instead of the requirements of §§ 2 to 8 LiqV. The requirements for the suitability of such a model are also specified in § 10 LiqV. The approval for use is granted by the BaFin on application and after an examination to be carried out by the Deutsche Bundesbank or BaFin according to § 44 KWG .
The LiqV thus follows the system of the Solvency Ordinance . This gives the institutions the option of using their own risk control models instead of standardized calculation methods upon request, after review and approval , for the purpose of determining the regulatory capital requirements for market price risks , credit risks and operational risks .
