Proposed Directive on Internal Liquidity Adequacy Assessment Process

The Prudential Authority of the South African Reserve Bank has released a proposed directive for consultation concerning the Internal Liquidity Adequacy Assessment Process (ILAAP). This initiative aims to establish a formal framework for assessing internal liquidity adequacy, aligning with international standards set by the Basel Committee on Banking Supervision (BCBS) regarding sound liquidity risk management and supervision.

Financial institutions, particularly banks, are expected to review this proposed directive and provide feedback. While specific compliance deadlines are not yet stated, regulated entities should prepare for potential new requirements and reporting obligations related to liquidity risk management. The consultation period is critical for shaping the final directive and understanding its implications for operational processes and risk management frameworks.