In this section, banks should describe the framework and IT systems for identifying, measuring, managing and monitoring and both internal and external reporting of liquidity and funding risks, including intraday risk. The assumptions and methodologies adopted should be described, key indicators should be evidenced, and the internal information flows described.

Banks may provide a summary on the future models and methodologies being considered and developed including their strengths and weaknesses.

Should the internal models vary from any regulatory methodologies approved for LCR and NSFR purposes, this section would provide a detailed comparison explaining both the methodological and parameterization differences between the internal models and the regulatory models and how those affect the liquidity measures for ILAAP purposes.

Further, the explanation of the differences between results of the internal models for LCR, NSFR would be set out at the level at which the ILAAP is applied. SAMA would expect the explanation to be sufficiently granular to show the differences at the level of each of the Pillar 1 risks.