OCC Bulletin 2020-18| March 19, 2020

Money Market Liquidity Facility: Interim Final Rule

To

Chief Executive Officers of All National Banks, Federal Savings Associations, and Federal Branches and Agencies; Department and Division Heads; All Examining Personnel; and Other Interested Parties

Summary

The Office of the Comptroller of the Currency (OCC), along with the Board of Governors of the Federal Reserve System (Federal Reserve) and the Federal Deposit Insurance Corporation (FDIC) (collectively, the agencies), today announced an interim final rule to ensure that financial institutions will be able to effectively use a liquidity facility launched on Wednesday, March 18, 2020, by the Federal Reserve. The Federal Reserve launched the Money Market Mutual Fund Liquidity Facility to enhance the liquidity and functioning of money markets and to support the economy.

Note for Community Banks

This bulletin applies to all OCC-supervised banks.1

Highlights

The interim final rule

  • modifies the agencies' capital rules so that financial institutions receive credit for the low risk of their Money Market Mutual Fund Liquidity Facility activities.
  • reflects the fact that institutions would be taking no credit or market risk in association with such activities.

The change only applies to activities with the Money Market Mutual Fund Liquidity Facility.

Further Information

Please contact the Capital Policy Unit at (202) 649-6370.

 

Grovetta N. Gardineer
Senior Deputy Comptroller for Bank Supervision Policy

Related Link

1 The term "banks" refers collectively to national banks, federal savings associations, and federal branches and agencies of foreign banking organizations.