As explicitly set out in Article 412 of the CRR and as consistently emphasised by the supervisory authorities with regard to the regulatory aim of the liquidity requirements, institutions are permitted, in times of stress, to use the liquid assets held in compliance with the liquidity coverage requirement (LCR). They can thus use the liquidity buffer in the current situation; even if this means the LCR minimum requirements are not met, it will not be necessary to obtain the prior approval of the competent supervisory authority. In accordance with Article 414 of the CRR, where an institution does not meet, or does not expect to meet, the LCR minimum requirements, it must merely notify the competent authorities without delay.

The supervisors responsible for the institution at BaFin and at the Deutsche Bundesbank will determine the specific information requirements that will apply until the LCR minimum requirements are again met. Alternatively, or in addition to the supervisory reporting under Implementing Regulation (EU) 680/2014, this can include the use of “liquidity calls”, internal liquidity reporting and/or projections or even LCR approximations. Furthermore, an LSI must always notify the supervisors responsible for the institution at BaFin and at the Deutsche Bundesbank without delay if the liquidity coverage ratio shows any continued decreases to levels of less than 90%, 80%, 70%, etc. In light of this additional duty to provide information, BaFin will generally waive the requirement for LSIs to submit daily liquidity reports under Implementing Regulation (EU) 680/2014.

As a rule, BaFin will be adopting a generous approach in assessing the institutions’ plans to restore the LCR. It is likely that BaFin will expect the minimum ratio to be restored only once the economic situation has again improved. BaFin will work with the institution to determine the specific steps to be taken.