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Kingdom Bank

For non-systemically important institutions the benefits of disclosing this information more frequently than annually are unlikely to outweigh the costs. Such disclosures would most likely require review and approval by the governing body which adds a significant burden on smaller institutions.
Although the production of the LCR is feasible from an operational point of view, the cost of doing so would be significant for many smaller institutions. In our case this has been estimated at an increase of 1% in annual operating expenditure. Whilst this would be sustainable for a short period of time (e.g. during a liquidity stress), it would add a significant and unsustainable cost burden over the long-term.
Proportionality: A simplified disclosure template would minimise the time and cost reporting burden on smaller institutions, which is already significant. The sign-off process forming part of the LCR production could then be targeted at the key components of the LCR. However, if a comprehensive template were to be required, there would be additional time required to consider whether items are material for each (daily) submission.
Frequency: For non-systemically important institutions the benefits of disclosing this information more frequently than annually are unlikely to outweigh the costs. Such disclosures would most likely require review and approval by the governing body which adds a significant burden on smaller institutions.
Methodology: Although the production of the LCR is feasible from an operational point of view, the cost of doing so would be significant for many smaller institutions. In our case this has been estimated at an increase of 1% in annual operating expenditure. Whilst this would be sustainable for a short period of time (e.g. during a liquidity stress), it would add a significant cost burden over the long-term. The benefits of this methodology would appear to be disproportionate to the associated costs for non-systemically important institutions.
A simplified disclosure template would minimise the time and cost reporting burden on smaller institutions, which is already significant. The sign-off process forming part of the LCR production could then be targeted at the key components of the LCR. However, if a comprehensive template were to be required, there would be additional time required to consider whether items are material for each (daily) submission.
For non-systemically important institutions the disclosure of the key components of the LCR (LCR ratio, numerator and denominator only) based on quarter-end observed data is considered to be sufficient for external stakeholders.
Matt Slack
K