Agencies Issue Q&As on Use of Capital, Liquidity Buffers

Posted: Mar 20 2020

Following their recent statement urging banks to use their capital and liquidity buffers to help meet the needs of borrowers amid the coronavirus pandemic, the federal banking agencies yesterday issued a Q&A document addressing several questions they have fielded about the statement and an associated interim final rule.

The Q&As address: the meanings of a liquidity buffer and a capital buffer; implications of draws on the discount window for the Liquidity Coverage Ratio; the intersection of the statement on buffers with recovery or resolution plan triggers; and the application of the statement to total loss-absorbing capacity.

To read more visit: https://www.fdic.gov/news/news/financial/2020/fil20020a.pdf