CCEBS draft guidelines on liquidity cost benefit allocation(CP36)

Start Date: 10/03/2010 | Deadline: 01/06/2010

The Committee of European Banking Supervisors (CEBS) today publishes its consultation paper on draft guidelines on liquidity cost benefit allocation. The consultation is open to all interested parties, including supervised institutions and other market participants.

Following the publication of its advice to the European Commission on Liquidity Risk Management in September 2008 and the amendments to the Capital Requirements Directive issued in September 2009 (see the new Annex V) that call for "robust strategies, policies, processes and systems for the identification, measurement, management and monitoring of liquidity risk…" that "…shall also include adequate allocation mechanisms of liquidity cost, benefits and risks", CEBS has committed to undertake further work on liquidity cost allocation.

The main objective of CEBS's guidelines is to provide high-level guidance to the institutions on the main elements to be considered when creating or reviewing adequate fund allocation mechanisms including liquidity cost, benefits and risks. Thus, a liquidity cost concept that includes not only direct funding costs but also associated indirect costs such as liquidity contingency support is proposed.

The guidelines focus on liquidity cost benefit allocation mechanisms as an important contribution to the institution's liquidity management framework and can as such help institutions to link their strategic objectives with liquidity resource allocation. Taking the proportionality principle into account, the draft guidelines are intended to give guidance to a wide range of institutions in terms of size and business models.

Annex 1 of these guidelines also provides examples of mechanisms currently observed in certain institutions.

CEBS submits its initial views for a public consultation which starts today and runs to 10 June 2010. Comments received will be published on CEBS's website unless respondents request otherwise. Please send your comments to the following email address:

A public hearing will be held on 1 June 2010 at CEBS's premises in London, from 09.30 to 12.00 to allow interested parties to share their views with CEBS.


  1. Moorad Choudhry [PDF, 27.8KB]
  2. Dutch Banking Association (NVB) [PDF, 59.8KB]
  3. Intesa Sanpaolo [PDF, 33.6KB]
  4. ACI-Germany [PDF, 102.1KB]
  5. European Savings Banks Group (ESBG) [PDF, 027.2KB]
  6. Zentraler Kreditausschuss (ZKA) [PDF, 54.9KB]
  7. French Banking Federation (FBF) [PDF, 161.1KB] - Cover letter [PDF, 1,480.4KB]
  8. Euroclear [PDF, 28.8KB]
  9. Moody's Analytics [PDF, 606.7KB]
  10. European Banking Federation (EBF) [PDF, 115.1KB]
  11. Joint response - AFME, BBA and ISDA [PDF, 850.6KB]