FR4198_20221115_omb

Supporting Statement for the
Interagency Policy Statement on Funding and Liquidity Risk Management
(FR 4198; OMB No. 7100-0326)
Summary
The Board of Governors of the Federal Reserve System (Board), under authority
delegated by the Office of Management and Budget (OMB), has extended for three years,
without revision, the Interagency Policy Statement on Funding and Liquidity Risk Management
(FR 4198; OMB No. 7100-0326). The Interagency Policy Statement on Funding and Liquidity
Risk Management (Guidance)1 was issued to provide consistent interagency expectations on
sound practices for managing funding and liquidity risk. The Guidance includes a number of
voluntary recordkeeping provisions that apply to bank holding companies, savings and loan
holding companies, state-licensed branches and agencies of foreign banks (other than insured
branches), corporations organized or operating under sections 25 or 25A of the Federal Reserve
Act (agreement corporations and Edge corporations), and state member banks (collectively,
financial institutions). The recordkeeping provisions relate to liquidity risk management policies,
procedures, and assumptions, and contingency funding plans (CFPs).
The estimated total annual burden for the FR 4198 is 154,592 hours.
Background and Justification
The financial market stress experienced in 2007-2009 demonstrated the importance of
liquidity risk management to the safety and soundness of financial institutions. Following the
financial crisis, financial supervisory authorities worked on an international and national level
through various groups (e.g., the Basel Committee on Banking Supervision (BCBS), the Senior
Supervisors Group, and the Financial Stability Forum) to review institutions’ assessment of
liquidity risk and supervisors’ approach to liquidity risk supervision.
As part of these efforts, the agencies issued the Guidance, which became effective
May 21, 2010. The Guidance summarizes principles of sound liquidity risk management that the
agencies had identified in the past and, where appropriate, harmonized those principles with the
“Principles for Sound Liquidity Risk Management and Supervision” issued by the BCBS in
September 2008. 2
Description of Information Collection
The Guidance includes two voluntary recordkeeping provisions:
“Interagency Policy Statement on Funding and Liquidity Risk Management,” 75 FR 13656 (March 22, 2010). The
Guidance was published jointly by the Board, Office of the Comptroller of the Currency (OCC), Office of Thrift
Supervision, Federal Deposit Insurance Corporation (FDIC), and National Credit Union Administration
(collectively, the agencies).
2
Basel Committee on Banking Supervision, “Principles for Sound Liquidity Risk Management and Supervision,”
September 2008. See https://www.bis.org/publ/bcbs144.htm. While the BCBS liquidity principles primarily focus
on large internationally active financial institutions, the Guidance emphasizes supervisory expectations for all
domestic financial institutions including banks, thrifts, and credit unions.
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Liquidity Risk Management Policies, Procedures, and Assumptions
The Guidance states that financial institutions should develop and document liquidity risk
management policies and procedures commensurate with the institution’s complexity, risk
profile, and scope of operations. Sections 3 and 6 of the Guidance provide that financial
institutions should maintain such policies and procedures. The content that should be included in
such policies and procedures are set forth in sections 9, 11, 12, and 13 of the Guidance.
Additionally, section 15 of the Guidance provides that financial institutions should document the
assumptions that they use when measuring liquidity risk.
CFPs
Section 6 of the Guidance states that financial institutions should have a CFP that
sufficiently addresses potential adverse liquid events and emergency cash flow requirements, and
section 34 of the Guidance states that the CFP should be documented. The content that should be
included in a CFP are set forth in sections 31, 34, 35, and 37 of the Guidance.
Respondent Panel
The FR 4198 panel comprises bank holding companies, savings and loan holding
companies, state-licensed branches and agencies of foreign banks (other than insured branches),
corporations organized or operating under sections 25 or 25A of the Federal Reserve Act
(agreement corporations and Edge corporations), and state member banks.
Time Schedule for Information Collection
The documentation required by the Guidance is maintained by each institution; therefore,
the documentation is not collected or published by the Federal Reserve System. The voluntary
recordkeeping described in the Guidance is ongoing.
Public Availability of Data
There is no data related to this information collection available to the public.
Legal Status
The recordkeeping provisions of the Guidance are authorized pursuant to sections 9(6),
25, and 25A of the Federal Reserve Act (12 U.S.C. §§ 324, 602, and 625) for state member
banks, agreement corporations, and Edge corporations, respectively; section 5(c) of the Bank
Holding Company Act of 1956 (12 U.S.C. § 1844(c)) for bank holding companies; section
10(b)(3) of the Home Owners’ Loan Act (12 U.S.C. § 1467a(b)(3)) for savings and loan holding
companies; and section 7(c)(2) of the International Banking Act of 1978 (12 U.S.C. §
3105(c)(2)) for state-licensed branches and agencies of foreign banks, other than insured
branches. The FR 4198 recordkeeping provisions are contained within guidance, which is
nonbinding, and therefore are voluntary.

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Because these records would be maintained at each banking organization, the Freedom of
Information Act (FOIA) would only be implicated if the Board obtained such records as part of
the examination or supervision of a banking organization. In the event the records are obtained
by the Board as part of an examination or supervision of a financial institution, this information
is considered confidential pursuant to exemption 8 of the FOIA, which protects information
contained in “examination, operating, or condition reports” obtained in the bank supervisory
process (5 U.S.C. § 552(b)(8)). In addition, the information may also be kept confidential under
exemption 4 for the FOIA, which protects nonpublic commercial or financial information,
which is both customarily and actually treated as private by the respondent (5 U.S.C. §
552(b)(4)).
Consultation Outside the Agency
The Guidance was published jointly by the agencies. There has been no consultation
outside of the Federal Reserve System with respect to this proposal.
Public Comments
On April 6, 2022, the Board published an initial notice in the Federal Register (87 FR
19927) requesting public comment for 60 days on the extension, without revision, of the
FR 4198. The comment period for this notice expired on June 6, 2022. The Board did not receive
any comments. The Board adopted the extension, without revision, of the FR 4198 as originally
proposed. On August 2, 2022, the Board published a final notice in the Federal Register (87 FR
47211).
Estimate of Respondent Burden
As shown in the table below, the estimated total annual burden for the FR 4198 is
154,592 hours. These recordkeeping provisions represent approximately 2.2 percent of the
Board’s total paperwork burden.

FR 4198
Implementation of
recordkeeping guidance
Ongoing recordkeeping

Estimated
number of
respondents3

Estimated
annual
frequency

37
4,646

1
1

Total

3

Estimated
Estimated
average hours annual burden
per response
hours
160
32

5,920
148,672
154,592

Of these respondents, approximately 21 implementing recordkeeping and 2,961 maintaining ongoing
recordkeeping are considered small entities as defined by the Small Business Administration (i.e., entities with less
than $600 million in total assets), https://www.sba.gov/document/support-table-size-standards. There are no special
accommodations given to mitigate the burden on small institutions.

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The estimated total annual cost to the public for the FR 4198 is $9,345,086.4
Sensitive Questions
These collections of information contain no questions of a sensitive nature, as defined by
OMB guidelines.
Estimate of Cost to the Federal Reserve System
Because the records maintained pursuant to the Guidance are maintained at the financial
institutions and not collected by the Federal Reserve System, the estimated cost to the Federal
Reserve System is negligible.

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Total cost to the public was estimated using the following formula: percent of staff time, multiplied by annual
burden hours, multiplied by hourly rates (30% Office & Administrative Support at $21, 45% Financial Managers at
$74, 15% Lawyers at $71, and 10% Chief Executives at $102). Hourly rates for each occupational group are the
(rounded) mean hourly wages from the Bureau of Labor Statistics (BLS), Occupational Employment and Wages,
May 2021, published March 31, 2022, https://www.bls.gov/news.release/ocwage.t01.htm. Occupations are defined
using the BLS Standard Occupational Classification System, https://www.bls.gov/soc/.

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