The Financial Services Authority (FSA) published its enhanced liquidity regime in October 2009. This introduced
both tougher qualitative and quantitative standards for firms.
At that stage the FSA said that it would not tighten quantitative standards
before economic recovery is assured given that all firms were experiencing a
market-wide stress. The FSA committed to giving a further update in the first
quarter of 2010.
The FSA believes that it would be premature to increase liquidity
requirements across the industry at the current time. This position will be
reviewed later on in the year with a further announcement in Q4, 2010.
Meanwhile, the FSA is continuing to work with firms that are most affected by
the new regime focusing on the steps they are taking to mitigate liquidity risk
and on the additional impact of our progressively tightening quantitative
requirements.
Source: www.riskcenter.com
