The Danish Financial Supervisory Authority has revised two liquidity guidance documents to make the framework simpler and more usable, with a particular focus on small and medium-sized banks. The updated guidance is intended to help credit institutions meet regulatory requirements more efficiently in day-to-day liquidity risk management and in the annual Internal Liquidity Adequacy Assessment Process (ILAAP) self-assessment. The revised guidance reflects regulatory changes since the previous versions and translates extensive European Banking Authority guidelines into more practical supervisory expectations. Compared with the 2017 and 2021 editions they replace, the documents are shorter and more targeted, focus on the requirements most relevant for smaller institutions, provide clearer descriptions of how to comply in practice, and explain how sector templates can be used in liquidity risk management. The updated ILAAP guidance also now explicitly covers the requirement for stable funding under the Net Stable Funding Ratio.
Danish Finanstilsynet 2025-10-24
Danish Financial Supervisory Authority revises liquidity risk management and ILAAP guidance to simplify expectations for smaller banks
The Danish Financial Supervisory Authority has revised liquidity guidance to simplify the framework for small and medium-sized banks, enhancing usability in liquidity risk management and the Internal Liquidity Adequacy Assessment Process (ILAAP). The updates incorporate European Banking Authority guidelines, offering clearer compliance instructions and emphasizing requirements for smaller institutions. The revised ILAAP guidance now explicitly includes the Net Stable Funding Ratio requirement.