May 28, 2021
The Board of Governors of the Federal Reserve System
20th Street and Constitution Avenue NW, Washington, DC20551
Japanese Bankers Association

JBA high level comments on the proposal to revise the Complex Institution Liquidity
Monitoring Report (FR 2052a; OMB Control Number 7100-0361)
Dear Sirs/Madams:
The Japanese Bankers Association1 (JBA) appreciates the opportunity to provide our comments on theproposal by the Board of Governors of the Federal Reserve System (the “Federal Reserve”) to revise theComplex Institution Liquidity Monitoring Report (FR 2052a) (hereafter “the Proposal)” issued on March 29,
2021.2The JBA member banks have significant operations in the U.S., which are the center of operations for thesebanks outside Japan, and the Proposal affects not only the banking activities of our member banks within theU.S. but also their global businesses.
We hope you find our comments constructive and useful in further advancing this critical agenda.

Request for postponing the effective date
The final rule implementing the Net Stable Funding Ratio (“NSFR”) was released on October 20, 2020, andfirms subject to the NSFR are currently preparing for the July 1, 2021 effective date of this rule. The proposed
revisions to the FR 2052a were published in the Federal Register on March 29, 2021 with a 60-day comment
period closing on May 28, 2021 and an effective date of July 1, 2021.
Most of the JBA member banks are no longer subject to the Liquidity Coverage Ratio (“LCR”) or the NSFR
requirements, but some of them are still in the scope for FR 2052a reporting, which incorporates certain datarequired under the NSFR. Additionally, some of the larger JBA member banks that are not subject to the LCRor the NSFR but whose combined U.S. operations (“CUSO”) fall under Category II or III under the FBO
Tailoring Rules3, are submitting the FR 2052a report on a daily T+2 basis as compared to all Category IV
institutions, which are only required to submit the FR 2052a on a monthly basis. New FR 2052a reporting
requirements will require banks in Category II and III to develop substantial data capabilities andenhancements for reporting some NSFR components even though these banks are not required to comply with
the NSFR requirements. Given the current absence of an NSFR reporting framework for the banks not subjectto this rule, and the substantial build-out necessary for these banks to meet the proposed FR 2052a changes,
we believe that a phased approach for the implementation of the new requirements should be implemented.
Banks that are not subject to the NSFR should be given more time to implement the additional FR 2052a
reporting requirements while banks that are subject to the NSFR requirements can start reporting their datasooner. Therefore, the JBA would like to request a postponement of the effective date for the change of the FR1The Japanese Bankers Association is the leading trade association for banks, bank holding companies and bankers associations inJapan. As of May 28, 2021, the JBA has 114 Full Members (banks), 3 Bank Holding Company Members (bank holding companies), 74
Associate Members (banks & bank holding companies), 58 Special Members (regionally-based bankers associations) and one
Sub-Associate Member for a total of 250 members. Several of its largest member banks are active participants in the U.S. financial
markets.
2 86 Fed. Reg. 16365 (March 29, 2021).
3 The Federal Reserve issued a final enhanced prudential standards tailoring rule and the banking agencies issued a companion final
rule on capital and liquidity tailoring on October 10, 2019 (together, the “Tailoring Rules”).

12052a proposed reporting requirements for banks that are not subject to the NSFR. Since all the JBA member
banks are not subject to the NSFR, our recommendation would be to extend the proposed implementation
timeline of the proposed FR 2052a items necessary for the Federal Reserve to calculate the NSFR to October
1, 2022, for those institutions that are not subject to NSFR.
The Proposal contains significant changes to the FR 2052a that could impact a firm’s compliance with the newreporting requirements. Furthermore, the Proposal requires multiple new data elements, three new
supplemental tables, and additional breakdowns of counterparty data. However, the Proposal provides too
short a transition period of weeks, or even days, for the implementation of a robust reporting framework.
The proposed timeline clearly provides respondents with insufficient time to utilize the processes andprocedures developed for implementing changes to reporting systems in order to meet both the Federal
Reserve’s, and their own, high expectations for a sustainable process involving testing, data quality,governance, and controls, including testing protocols and data accuracy reviews prior to the implementation ofchanges. The Federal Reserve’s decision to use the FR 2052a as a means for collection of NSFR data isrequiring banking organizations that are not subject to the NSFR under the operation of the Tailoring Rules tomake significant changes to their existing regulatory reporting processes without having developed therequisite data collection infrastructure needed for gathering this new data. In addition to imposing a greater
burden on these institutions compared to institutions already subject to the LCR and the NSFR, the timelines
provided in the Proposal do not allow for a sustainable development of this new infrastructure for purposes ofthe FR 2052a.

Clarification for Scope of Applicability and FBO Organizational Differences
The Tailoring Rules classified foreign banking organizations (“FBOs”) into three categories based on theirasset size and other risk-based indicators. The Tailoring Rules are already in effect, and FBOs have begun
complying with their requirements based on the FBOs’ respective categories. While a number of the large
Japanese FBOs are subject to FR 2052a reporting with respect to their CUSO, none of these banks is subject
to the LCR or the NSFR rules, which would be applicable at the level of their subsidiary U.S. operations,because the U.S. subsidiaries fall under a lower category than the CUSO operations under the Tailoring Rules.
Although we recognize the value of the FR 2052a for its use in existing liquidity monitoring programs asapplied to individual banks and to systemic analyses of liquidity, structural differences between the FBO U.S.
branches and the Intermediate Holding Company (“IHC”) subsidiaries result in the branches lacking thededicated capital that is required for the construction of an NSFR reporting model. Additionally, risk weightcalculations applicable to branches based on home country regulations are different than the risk weightmeasures required in the FR 2052a. FBO-specific organizational structures present additional challenges to theimplementation of the proposed reporting requirements. Given the inconsistencies between these structures
and the expansion of data requested under the Proposal, we ask that the U.S. branches continue to be subject
to existing requirements and not to any newly proposed data that is specific to the NSFR.
(End)2