MAS consults on proposed Guidelines on Liquidity Risk Management for banks, merchant banks, and finance companies

29 September 2025

On 29 August 2025, the Monetary Authority of Singapore (“MAS”) issued its Consultation Paper on Guidelines on Liquidity Risk Management (Banks). The consultation closed on 29 September 2025.

The Guidelines on Risk Management Practices - Liquidity Risk were issued in 2013 and are applicable to all financial institutions in Singapore. Building on the 2013 Guidelines, MAS proposes an updated set of Guidelines on Liquidity Risk Management (“Guidelines”) for banks, merchant banks, and finance companies in Singapore (collectively, “Banks”). The 2013 Guidelines will continue to apply to all other types of financial institutions in Singapore.

The updated Guidelines will provide greater clarity on MAS’ supervisory expectations on the management of liquidity risk by Banks. They are consistent with the Principles for Sound Liquidity Risk Management and Supervision by the Basel Committee on Banking Supervision, and consolidate supervisory expectations that MAS has communicated through past reviews and supervisory engagements.

As liquidity stresses can materialise at short notice, Banks need to maintain appropriate buffers and establish robust processes to respond quickly to liquidity stresses. The updated Guidelines elaborate on MAS’ expectations for Banks’ governance frameworks and risk management processes, including the need for robust liquidity stress testing and operationally ready contingency funding plans. The updated Guidelines also set out good practices observed across the banking sector to serve as additional references.

As with all other guidelines issued by MAS, Banks should apply the Guidelines in a proportionate manner, taking into account the nature, size, and complexity of their activities.

MAS proposes that following the conclusion of the consultation, the Guidelines will take effect six months after the final Guidelines are published.

Reference materials

The consultation paper is available on the MAS website www.mas.gov.sg.