Bulgaria: Regulation No. 11 on Liquidity Management and Supervision of Banks

This document articulates about the regulation issued by the Bulgarian National Bank (BNB) pertaining to liquidity management and supervision of banks.

It states that the main objective of the regulation was to enable a bank to plan for survival in the event of unforeseen outflow of its funds due to unexpected developments, such as large loan losses, fraud or similar adverse occurrences.

The different articles of the regulation outline the following aspects of liquidity management. These include the:

• General provisions of the regulation;
• Management principles, that the bank should follow with regard to regular monitoring and assessment of its prospective cash flow requirements, diversification of deposits and other funding sources, and appropriate contingency planning;
• Basis of structure of the management information systems that all banks have to have in place, and the output that it should generate with respect to information on cash flows, maturity ladder and the adequate amount of liquid assets that have to be maintained;
• Internal liquidity management rules that the staff were to abide by;
• Provision for liquidity supervision for those banks operating with liquidity problems and the course of action to follow in times of crisis;
• Enforcement measures and sanctions that would come under play in case of violation of this regulation.