NBU introduces LCR, NSFR liquidity standards for banking groups

MOSCOW. Jan 11 (Interfax) - The National Bank of Ukraine (NBU) has introduced prudential liquidity standards on a consolidated basis - the liquidity coverage ratio (LCR) and the net stable funding ratio (NSFR) that must equal at least 100%, Ukrainian media said, citing the NBU website.

"The introduction of LCR and NSFR standards for banking groups is another step toward bringing the NBU's regulations closer to EU standards," the regulator said.

The LCR imposes a minimum liquidity requirement on a banking group to cover the net expected outflow of funds within 30 calendar days based on a stress scenario, whereas the NSFR is the minimum required level of a banking group's stable financing over a one-year period, it said.

There will be a phased transition to the new requirements, the NBU said. Specifically, banks that are the authorized representatives of their banking groups will be given until October 1, 2024 to develop intra-group rules for calculating LCRs and NSFRs.

October 1, 2024 is also the first day of a six-month trial period for calculating LCRs and NSFRs the results of which will help decide whether to abolish the current liquidity (H5k) and short-term liquidity (H6k) standards.

Banking groups will also be required to comply with the normative value of LCRs and NSFRs of at least 100% from April 1, 2025.

The aforementioned changes were approved by the NBU board's resolution, dated January 5, 2024, and enter into force on April 1, 2024.