615.5134—Liquidity reserve requirement.
(a)
Each Farm Credit bank must maintain a liquidity reserve, discounted in accordance with paragraph (c) of this section, sufficient to fund 90 days of the principal portion of maturing obligations and other borrowings of the bank at all times. The liquidity reserve may only be funded from cash, including cash due from traded but not yet settled debt, and the eligible investments under § 615.5140. Money market instruments, floating, and fixed rate debt securities used to fund the liquidity reserve must be backed by the full faith and credit of the United States or rated in one of the two highest NRSRO credit categories. If not rated, the issuer's NRSRO credit rating, if one of the two highest, may be used.
(b)
All investments that the bank holds for the purpose of meeting the liquidity reserve requirement of this section must be free of lien.
(2)
Multiply money market instruments and floating rate debt securities that are below the contractual cap rate by 95 percent of the market value.
(3)
Multiply fixed rate debt securities and floating rate debt securities that meet or exceed the contractual cap rate by 90 percent of the market value.
(4)
Multiply individual securities in diversified investment funds by the discounts that would apply to the securities if held separately.
(d)
Each Farm Credit bank must have a contingency plan to address liquidity shortfalls during market disruptions. The board of directors must review the plan each year, making all needed changes. Farm Credit banks may incorporate these requirements into their § 615.5133 investment management policies.