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The Bank Liquidity Regulation Committee held its fourth session yesterday with the attendance of all its members.
The members of the Committee recognized that, although the operating conditions of the markets have improved since the beginning of the Covid-19 pandemic, both internationally and in Mexico there are still some elements of uncertainty associated with the duration of the impact of the pandemic . Likewise, they recognized that the exceptions issued on April 14, 2020 on the General Provisions on liquidity requirements for multiple banking institutions (Liquidity Provisions), whose term remains in effect until March 1, 2021, have contributed to the orderly functioning of the bank funding markets and have promoted the efficient flow of liquidity.
In this way, Banco de México and the National Banking and Securities Commission, at the request of the Committee, will jointly extend the term of application of the exceptions in force for six more months; and they will establish a period of gradual elimination of the exceptions to the liquidity Provisions for an additional six months, in order to avoid abrupt corrections in the behavior of banking institutions, which could negatively affect their liquidity management.
The financial authorities will remain vigilant and, if necessary, will evaluate the relevance of implementing additional adjustments.
The Bank Liquidity Regulation Committee is made up of the Secretary of Finance and Public Credit, who chairs it, the Governor of Banco de México, the Undersecretary of Finance and Public Credit, the President of the National Banking and Securities Commission and two Deputy Governors of the Central Bank.