Operational Liquidity Testing Checklist and Best Practices
posted on Friday, November 1, 2019 in Advances
Testing ensures your operational procedures are effective and demonstrates your access to liquidity.
Can your institution demonstrate the appropriate personnel understand the process of requesting funds from FHLB Des Moines?
✔ Appropriate user permissions are assigned
✔ Ensure adequate collateral capacity
✔ Understand how to complete a transaction on eAdvantage
✔ Ensure your Demand Deposit Account has funds to cover 4% activity stock required for an advance transaction
✔ Complete wire transaction of Overnight funds out of Demand Deposit Account
✔ Repay funds the next day
✔ Test twice per year
✔ Test with a meaningful amount
✔ Do not test on a Friday
Testing Procedure Steps
Testing is a good way for your personnel to familiarize themselves with eAdvantage.
❶ Setup Users and Permissions
Ensure all permissions and authorizations are established for appropriate individuals to complete an Advance Transaction on eAdvantage.
User authorizations are managed by your institution’s eAdvantage User Administrators under the “To Remove or Add a User Administrator” section on the eAdvantage homepage.
Confirm your authorized users have set up Two-Factor Security, which requires the use of an additional device to verify identity of the user. Users may initiate the Two-Factor Security setup under “Settings” in the navigation menu of eAdvantage.
Instructions for setting up Two-Factor Security for your mobile device or PC are available in the “Guide to eAdvantage,” shown on the homepage after logging in to eAdvantage. Device options include iPhone/iPad (preferred), Android device (preferred), or Windows PC.
❷ Ensure Adequate Credit Capacity
- Within eAdvantage, under Account > Account Balances, users can view a Summary of Account Balances including, "Remaining Borrowing Capacity" to ensure adequate pledged collateral.
❸ Execute an Overnight Advance Transaction on eAdvantage
Authorized individuals login to eAdvantage.
Step-by-step instructions for an Advance Transaction are available in the “Guide to eAdvantage,” shown on the homepage after logging in to eAdvantage.
Your Demand Account will be debited for the stock purchase amount (activity stock requirement = 4 percent of the advance amount)
❹ Verify If Your Institution has Established a Wire to Complete the Transfer of Funds
❺ Finalize Your Test the Next Day by Completing the Repay of Fed Funds Form on eAdvantage
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Reminders for a Successful Test
Testing may be completed on eAdvantage or by calling the Money Desk. Regardless of which option you use, a thorough test includes completing a wire transfer of funds.
Frequency: Test at least twice per year.
Best Day and Time: Test on a Monday, Tuesday, Wednesday or Thursday. Testing on a Friday will incur two extra days of interest.
Meaningful Amount: Test with a meaningful amount to demonstrate borrowing capacity to regulator. The recommended amount is at least $100,000.
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Testing or Technical Assistance
Help with user administrators or testing: Contact the Money Desk.
Technical assistance and password reset help: Contact the Service Desk.