Malaysia Guidelines on Liquidity Framework – An Overview and Summary of Requirements

• By: Staff Editor
• Date: May 26, 2013

The Liquidity Framework was introduced in 1998 to enhance liquidity management in banking institutions. It replaced the liquid asset ratio requirement. The Framework sets out to:

• Create awareness among banking institutions of their funding structure and their ability to handle short to medium-term liquidity problems
• Adopt a more efficient and on-going liquidity measurement and management for banking institutions
• Provide the Bank Negara Malaysia (BNM) with a better means of assessing the present and future liquidity position of banking institutions.

The Liquidity Framework is applicable to all commercial banks, finance companies and investment banks/merchant banks.