Operational Liquidity Testing Checklist and Best Practices

last updated on Thursday, July 15, 2021 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 4.5% 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

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.

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

• A complete test includes a wire transfer. Instructions for wire transfer are available within the "Guide to eAdvantage" found on the home page of eAdvantage.

❺ Finalize Your Test the Next Day by Completing the Repay of Fed Funds Form on eAdvantage

• Funds are not required to be repaid the next day. Your institution may have chosen different terms for this advance.

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. 

Reminder: Testing on 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.

Testing or Technical Assistance

Help with user administrators or testing: Contact the Money Desk.

Technical assistance and password reset help: Contact the Service Desk.