The requirements arising from BCBS (2008) are currently being implemented in many countries, with the UK’s FSA acting as a forerunner. To take the British example, FSA (2009) identifies liquidity buffers as the main means of mitigating liquidity risk. From a regulatory perspective, the quantification of such a liquidity buffer can happen in two ways:
Based on an individual liquidity adequacy • assessment regime (ILAA) mandated in standard ILAS (BIPRU 12.5), or
Based on a simplified ILAS regime • (BIPRU 12.6)