[Federal Register Volume 81, Number 103 (Friday, May 27, 2016)]
[Notices]
[Pages 33735-33737]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-12581]


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DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency


Agency Information Collection Activities; Information Collection 
Renewal; Submission for OMB Review; Funding and Liquidity Risk 
Management

AGENCY: Office of the Comptroller of the Currency (OCC), Treasury.

ACTION: Notice and request for comment.

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SUMMARY: The OCC, as part of its continuing effort to reduce paperwork 
and respondent burden, invites the general public and other Federal 
agencies to take this opportunity to comment on a continuing 
information collection, as required by the Paperwork Reduction Act of 
1995 (PRA).
    In accordance with the requirements of the PRA, the OCC may not 
conduct or sponsor, and the respondent is not required to respond to, 
an information collection unless it displays a currently valid Office 
of Management and Budget (OMB) control number.
    The OCC is soliciting comment concerning renewal of its information 
collection titled, ``Funding and Liquidity Risk Management.'' The OCC 
also is giving notice that it has sent the collection to OMB for 
review.

DATES: Comments must be received by June 27, 2016.

ADDRESSES: Because paper mail in the Washington, DC area and at the OCC 
is subject to delay, commenters are encouraged to submit comments by 
email, if possible. Comments may be sent to: Legislative and Regulatory 
Activities Division, Office of the Comptroller of the Currency, 
Attention: 1557-0244, 400 7th Street SW., Suite 3E-218, Mail Stop 9W-
11, Washington, DC 20219. In addition, comments may be sent by fax to 
(571) 465-4326 or by electronic mail to [email protected]. You may 
personally inspect and photocopy comments at the OCC, 400 7th Street 
SW., Washington, DC 20219. For security reasons, the OCC requires that 
visitors make an appointment to inspect comments. You may do so by 
calling (202) 649-6700 or, for persons who are deaf or hard of hearing, 
TTY,

[[Page 33736]]

(202) 649-5597. Upon arrival, visitors will be required to present 
valid government-issued photo identification and submit to security 
screening in order to inspect and photocopy comments.
    All comments received, including attachments and other supporting 
materials, are part of the public record and subject to public 
disclosure. Do not include any information in your comment or 
supporting materials that you consider confidential or inappropriate 
for public disclosure.
    Additionally, please send a copy of your comments by mail to: OCC 
Desk Officer, 1557-0244, U.S. Office of Management and Budget, 725 17th 
Street NW., #10235, Washington, DC 20503, or by email to: 
[email protected].

FOR FURTHER INFORMATION CONTACT: Shaquita Merritt, OCC Clearance 
Officer, (202) 649-5490 or, for persons who are deaf or hard of 
hearing, TTY, (202) 649-5597, Legislative and Regulatory Activities 
Division, Office of the Comptroller of the Currency, 400 7th Street 
SW., Suite 3E-218, Mailstop 9W-11, Washington, DC 20219.

SUPPLEMENTARY INFORMATION: The OCC requests that OMB extend its 
approval of the following collection:
    Title: Funding and Liquidity Risk Management.
    OMB Control No.: 1557-0244.
    Type of Review: Extension, without revision, of a currently 
approved collection.
    Description: The Interagency Policy Statement on Funding and 
Liquidity Risk Management \1\ (Policy Statement) summarizes the 
principles of sound liquidity risk management that the Federal banking 
agencies have issued in the past \2\ and, where appropriate, harmonizes 
these principles with the international statement issued by the Basel 
Committee on Banking Supervision titled ``Principles for Sound 
Liquidity Risk Management and Supervision.'' \3\ The Policy Statement 
emphasizes supervisory expectations for all depository institutions 
including banks, savings associations, and credit unions.
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    \1\ 75 FR 13656 (Mar. 22, 2010).
    \2\ For national banks and Federal savings associations, see the 
Comptroller's Handbook on Liquidity. For state member banks and bank 
holding companies, see the Federal Reserve's Commercial Bank 
Examination Manual (section 4020), Bank Holding Company Supervision 
Manual (section 4010), and Trading and Capital Markets Activities 
Manual (section 2030). For state non-member banks, see the FDIC's 
Revised Examination Guidance for Liquidity and Funds Management 
(Trans. No. 2002-01) (Nov. 19, 2001), and Financial Institution 
Letter 84-2008, Liquidity Risk Management (August 2008). For 
Federally insured credit unions, see Letter to Credit Unions No. 02-
CU-05, Examination Program Liquidity Questionnaire (March 2002). See 
also Basel Committee on Banking Supervision, ``Principles for Sound 
Liquidity Risk Management and Supervision'' (September 2008).
    \3\ Basel Committee on Banking Supervision, ``Principles for 
Sound Liquidity Risk Management and Supervision,'' September 2008. 
See www.bis.org/publ/bcbs144.htm. Federally insured credit unions 
are not directly referenced in the principles issued by the Basel 
Committee.
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    Section 14 of the Policy Statement provides that financial 
institutions should consider liquidity costs, benefits, and risks in 
strategic planning and budgeting processes. Significant business 
activities should be evaluated for liquidity risk exposure as well as 
profitability. More complex and sophisticated financial institutions 
should incorporate liquidity costs, benefits, and risks in the internal 
product pricing, performance measurement, and new product approval 
process for all material business lines, products, and activities. 
Incorporating the cost of liquidity into these functions should align 
the risk-taking incentives of individual business lines with the 
liquidity risk exposure their activities create for the institution as 
a whole. The quantification and attribution of liquidity risks should 
be explicit and transparent at the line management level and should 
include consideration of how liquidity would be affected under stressed 
conditions.
    Section 20 of the Policy Statement states that liquidity risk 
reports should provide aggregate information with sufficient supporting 
detail to enable management to assess the sensitivity of the 
institution to changes in market conditions, its own financial 
performance, and other important risk factors. Institutions also should 
report on the use of and availability of government support, such as 
lending and guarantee programs, and implications on liquidity 
positions, particularly since these programs are generally temporary or 
reserved as a source for contingent funding.
    Affected Public: Businesses or other for-profit.
    Frequency: On occasion.
    Estimated Burden: The OCC estimates the burden of this collection 
of information on national banks and Federal savings associations as 
follows:
    Estimated Number of Respondents: 1,469 total, 15 large (over $100 
billion in assets), 46 mid-size ($10-$100 billion), 1,408 small (less 
than $10 billion).
    Total Estimated Burden Hours: 102,496 hours.
    On February 29, 2016, the OCC published a notice for 60 days of 
comment concerning the collection, 81 FR 10364. One comment was 
received from an individual.
    The commenter stated that the collection is burdensome and that the 
regulatory expectations have no practical utility. Specifically, the 
commenter questioned whether there is any empirical evidence showing 
the association between inaccurate performance measurements and 
liquidity risk and whether it should be labeled operational risk 
instead. The commenter noted the lack of guidance on how product 
pricing, performance measurement, and internal approval processes 
impact liquidity risk, which they believe is likely due to the lack of 
connection between these factors and an institution's ability to meet 
its obligations. The commenter suggested that the OCC remove the 
portions of the guidance regarding the risk in internal product 
pricing, performance measurement, and new product approval process and 
replace them with definitions, explanations, or examples.
    The comprehensive set of reports used by banks to identify, 
measure, monitor and control liquidity risk have been shown to be 
effective by helping to identify risk so that management can implement 
appropriate mitigation actions. An institution's obligations, and the 
funding sources used to meet those obligations, depend significantly on 
its business mix, balance-sheet structure, and the cash flow profiles 
of its on- and off-balance sheet obligations. A necessary part of 
controlling liquidity risk is understanding how liquidity risk can be 
created. While it is prudent for banks to understand the product 
pricing, performance measurement and internal approval processes, the 
agencies restricted those expectations to complex and sophisticated 
organizations.
    (a) Whether the information collections are necessary for the 
proper performance of the functions of the OCC, including whether the 
information has practical utility;
    (b) The accuracy of the OCC's estimate of the information 
collection burden;
    (c) Ways to enhance the quality, utility, and clarity of the 
information to be collected;
    (d) Ways to minimize the burden of information collections on 
respondents, including through the use of automated collection 
techniques or other forms of information technology; and
    (e) Estimates of capital or start-up costs and costs of operation, 
maintenance, and purchase of the services necessary to provide the 
required information.


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    Dated: May 23, 2016.
Mary Hoyle Gottlieb,
Regulatory Specialist, Legislative and Regulatory Activities Division.
[FR Doc. 2016-12581 Filed 5-26-16; 8:45 am]
BILLING CODE 4810-33-P