## United States: Financial Sector Assessment Program-Technical Note-Systemic Risk Oversight and Systemic Liquidity

_IMF Staff Country Reports, August 10, 2020_

## Source details

**Canonical URL:** [United States: Financial Sector Assessment Program-Technical Note-Systemic Risk Oversight and Systemic Liquidity](https://www.imf.org/en/publications/cr/issues/2020/08/07/united-states-financial-sector-assessment-program-technical-note-systemic-risk-oversight-and-49655)

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## Bibliographic details
- Published: August 10, 2020
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781513552910.002

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### Overview
- Purpose: Review processes in the United States for systemic risk oversight and examine issues of systemic liquidity.
- Rationale: The heterogeneity of the United States (U.S.) financial markets and complex regulatory and supervisory institutional setup underscore the importance of enhancing systemic risk oversight and building effective macroprudential tools.
- Framework elements emphasized:
  - Identification and prioritization of system-wide risks and vulnerabilities to spur timely policy action.
  - Interagency sharing of information.
  - Identification of possible emerging regulatory gaps.
  - Obtaining a good overview of systemic risks.
  - Developing a cooperative framework to address identified threats to financial stability.

### Key findings and analysis
- The heterogeneity and institutional complexity of the U.S. financial system create challenges for comprehensive systemic risk oversight.
- Effective macroprudential frameworks should:
  - Enable timely identification and prioritization of system-wide risks and vulnerabilities.
  - Support interagency mechanisms for information sharing and gap identification.
  - Provide a consolidated overview of systemic risks to inform coordinated policy responses.
- The Technical Note includes an examination of systemic liquidity issues in U.S. markets.

### Systemic liquidity issues
- The Technical Note explicitly examines issues of systemic liquidity and relevant market functioning concerns.
- Keywords reflecting liquidity focus include: liquidity, money markets, repo market, FX liquidity provision protocol, liquidity support, support option, discount window, fed funds rate, Fed's FX liquidity swap lines.

### Policy implications and recommendations (high-level)
- Strengthen mechanisms for interagency cooperation and information sharing to detect emerging systemic risks and regulatory gaps.
- Develop and enhance macroprudential tools to address prioritized system-wide vulnerabilities.
- Ensure cooperative frameworks are in place to coordinate policy actions to mitigate threats to financial stability, including measures addressing systemic liquidity.

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_Source: https://www.imf.org/en/publications/cr/issues/2020/08/07/united-states-financial-sector-assessment-program-technical-note-systemic-risk-oversight-and-49655_