CRED 9.2 General requirements
A credit union must hold liquid assets of an amount and composition that is prudent and appropriate to the scale and nature of its business, having regard to material risks, including the risk of a sudden adverse cash flow, with a view to enabling it to meet its objective.
A credit union must establish, maintain and implement an up-to-date liquidity management policy statement approved by the committee of management and designed to ensure its compliance with CRED 9.2.1 R.
A version 2 credit union must send to the FSA a copy of its liquidity management policy statement as soon as is reasonably practicable after approval by the committee of management.
The responsibility for ensuring that a credit union can meet its obligations as they fall due rests with the credit union's management.
A credit union should be able to satisfy the FSA on a continuing basis that it has a prudent liquidity management policy and adequate management systems in place to ensure that the policy is adhered to.
The liquidity management policy statement of a credit union should set out the credit union's objectives for liquidity, the limits within which liquidity should be maintained, and the types of liquid assets which the credit union should hold.
A credit union's committee of management should review and approve its liquidity management policy statement at least once a year, and more frequently if necessary, especially in light of significant changes in business.
Where a version 2 credit union has borrowed wholesale funds, the maturity of such funds and the risk of their not being able to be refinanced should be taken into account in the formulation of the credit union's liquidity management policy statement.
1When a credit union provides ancillary services such as issuing and administering means of payment and money transmission, it should take into account the potentially greater volatility of its funds when deciding what amount and composition of liquid assets is necessary to comply with CRED 9.2.1 R.