Large Bank Examination Workshop February 2026

LRM Structure (Example)

BoD/ALCO

Independent Liquidity Risk Mgt 1. Independent risk area • Check and verify • Monitor limits • Escalate liquidity breaches • Test all liquidity assumptions • Review limit allocation • Independent evaluation of liquidity practices • Independent liquidity reporting

Treasury

Asset/Liability Mgt • Sets Liquidity Strategy and Planning • Aggregates risk by legal entity • Balance Sheet Mgt

• Internal Funds Pricing • Liquidity Stress Testing • ALCO Reporting

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Discussion • What red flags regarding liquidity risk are you hearing bankers talk about ?

• 1 • 2 • 3 • 4….

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