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Federal Reserve Bank of San Francisco
 Redacted

| 101 Market Street, San Francisco, CA 94105

LARGE INSTITUTIONS SUPERVISION GROUP 

Redacted Redacted

 LFBO DEDICATED SUPERVISORY TEAM LEAD 

SUPERVISION + CREDIT 

November 17, 2022 

BY SECURE EMAIL 

Greg Becker 

President & Chief Executive Officer 

C/O Ben Jones, Head of Regulatory Affairs 

SVB Financial Group 

3003 Tasman Drive 

Santa Clara, California 95054 

Entry Letter: 2023 Horizontal Liquidity Review (HLR) 

Dear Mr. Becker: 

The Federal Reserve will conduct its annual horizontal review of domestic and foreign-owned 

large banking organizations (LFBOs) liquidity risk management practices, including internal 

liquidity stress testing (ILST) assumptions and methodologies, and buffer monetization and 

composition.

1 The HLR will take place during the weeks of January 3, 2023 through 

March 10, 2023. 

To facilitate the exercise, please provide the items requested in the attachment(s) to this letter 

electronically via IntraLinks by no later than December 19, 2022. Management’s cooperation in 

providing the requested material in the time frame indicated will assist the supervisory team in 

concluding the review in a timely manner. 

During the HLR, supervisory teams may need to meet with members of management or staff. If 

a key member of management or staff is unavailable during the review, please provide a 

1 As part of the review, examiners will assess the firm’s practices for compliance with the Federal Reserve Board’s Regulation YY 

and WW, and consistency with expectations outlined in SR Letter 10-6, Interagency Policy Statement on Funding and Liquidity 

Risk Management, SR Letter 12-7, Guidance on Stress Testing for Banking Organizations with Total Consolidated Assets of More 

Than $10 Billion, and SR Letter 12-17, Consolidated Supervision Framework for Large Financial Institutions 

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secondary contact. Feedback will be provided to the firms following the conclusion of the 

review. 

Any questions relating to this correspondence may be directed to Dedicated Supersivory 

Team Lead 

Redacted Redacted

and/or Examiner-in-Charge 

Redacted

at 

. Thank you in advance for your cooperation. Please note that this 

letter contains confidential material and should be treated accordingly by your organization 

as described in the footnote2

. 

Sincerely,

Redacted

Redacted

 LFBO Dedicated Supervisory Team Lead 

cc: Dan Beck, Chief Financial Officer 

Ben Jones, Head of Regulatory Affairs 

, CDFPI 

, FDIC 

Redacted Redacted

Enclosure 

2 THIS DOCUMENT IS STRICTLY CONFIDENTIAL 

This document has been prepared by an examiner selected or approved by the Board of Governors of the Federal Reserve 

System. The document is the property of the Board of Governors and is furnished to directors and management for their 

confidential use. The document is strictly privileged and confidential under applicable law, and the Board of Governors has 

forbidden its disclosure in any manner without its permission, except in limited circumstances specified in the law (12 U.S.C 1817(a) 

and 1831m) and in the regulations of the Board of Governors (12 C.F.R. 261.20). Under no circumstances should the directors, 

officers, employees, trustees or independent auditors disclose or make public this document or any portion thereof except in 

accordance with applicable law and the regulations of the Board of Governors. Any unauthorized disclosure of the document 

may subject the person or persons disclosing or receiving such information to the penalties of Section 641 of the U.S. Criminal Code 

(18 U.S.C. 641). Each director or trustee, in keeping with his or her responsibilities, should become fully informed regarding the 

contents of this document. In making this review, it should be noted that this document is not an audit, and should not be 

considered as such. 

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Appendix A 

Information Request and Logistics 

Logistical Information 

The examination work will be conducted remotely. All email communication with examiners 

will need to have the EIC copied. Please be prepared to have the most appropriate staff 

attend the meetings. 

Intralinks Exchange 

An Intralinks exchange will be used for this review. We will send an invitation email to you for 

uploading documents. 

IntraLinks can be found here: 

IntraLinks Exchange Name:

Event Folder Name: 

Redacted RedactedRedacted

Information Request 

The following materials should be submitted to the Reserve Bank electronically no later than 

December 19, 2022. Please provide the name of the individual(s) responsible for providing 

and/or responding to questions for each of the requested materials to 

If any information has already been submitted to the Reserve Bank through the continuous 

supervision process, please reference the document(s) and submission date; there is no need 

to resubmit the document(s). Additionally, please reference document(s) that may address 

multiple items on the list. 

The requested items noted in this letter should be uploaded to IntraLinks in a manner 

consistent with this letter. For example: [Item #1.1 – 1.3] should be uploaded to the IntraLinks 

folder labeled “Objective 1.” 

Additional Note: Please submit documents in either “read only” for editable file formats (e.g. 

doc or xls) or in non-editable file formats (e.g., pdf, tif, jpg), and do not include zip files. 

. Also, please include a list of the documents provided in response to each 

request item. The Federal Reserve reserves the right to request additional supporting 

materials, where necessary. If requested, such materials must be provided to the Federal 

Reserve in a timely manner. 

Redacted

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Objective 1 - MRA Remediation 

N/A - The firm does not have any outstanding supervisory findings from prior HLRs. 

Objective 2 - Internal Liquidity Stress Testing (ILST) 

Item 

# 

Objective 2 - Information Request 

ILST Summary Template 

2.1 Completed "BHC/IHC" tab of the 2023 LFBO HLR ILST Summary Template - XLS as of 

9/30/22 and 10/31/22. 

2.2 Liquidity stress testing results (in Excel format with formulas, if available) including a 

full list of scenario descriptions, assumptions, and underlying calculations as of 

9/30/22 and 10/31/22. 

Governance & Oversight 

2.3 The firm's most recent liquidity stress testing policy, procedures and/or framework 

documents and any draft policy, procedures and framework documents pending 

approval. The submission should include details on: 

a) stress scenarios and assumptions used in the liquidity stress testing 

framework; 

b) supporting documentation for the inflow, outflow, and haircut assumptions 

used in the liquidity stress testing calculations; 

c) requirements for inclusion of assets into liquidity buffer; 

d) frequency of firm's liquidity stress testing and review/update of assumptions; 

e) governance/approval process around assumption changes. 

2.4 List of any material changes which have occurred over the prior year, or currently 

pending approval, to the firm's ILST framework, especially regarding stress scenarios 

and assumptions and the rationale for such changes. As appropriate, indicate 

whether the firm is planning to make any changes to the ILST framework in 2023; if so, 

please describe. 

2.5 Management committee meeting (i.e., ALCO or Risk Management Committee) 

packages and minutes that includes the liquidity stress testing results and MIS used to 

inform the committee members for last 12 months through October 31, 2022. 

2.6 Most recent reports produced by internal audit or independent risk function where the 

firm's stress testing was reviewed. 

Stress Testing Framework 

2.7 A detailed qualitative and quantitative description of how the firm's internal liquidity 

stress testing results are used to determine the size and composition of the liquidity 

buffer. 

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2.8 Reconciliation (if performed) of the firm's starting position for liquidity stress testing as 

of September 30, 2022 and October 31, 2022 with variance analysis commentary. 

2.9 A detailed description of how the firm incorporates "trapped liquidity" within ILST. If 

trapped liquidity is considered immaterial given the organizational structure or for 

other reasons, please note such and provide a description of stress testing practices 

for the Holding Company as well as any corresponding limits. 

Assumptions 

2.10 The firm's most recent policy/framework and/or any draft policy/framework 

pending approval that documents and provides support for the firm's methodology 

for determining deposit segmentation. 

2.11 Any supporting documentation related to wholesale funding ILST assumptions not 

included within responses to item(s) # 2.3 - 2.9. 

2.12 Any supporting documentation related to secured funding ILST assumptions not 

included within responses to item(s) # 2.3 - 2.9. 

2.13 Any supporting documentation related to unfunded commitment ILST assumptions 

not included within responses to item(s) # 2.3 - 2.9. 

2.14 Any supporting documentation related to intraday liquidity ILST assumptions not 

included within responses to item(s) # 2.3 - 2.9. 

2.15 Any supporting documentation related to cash inflow ILST assumptions not included 

within responses to item(s) # 2.3 - 2.9. 

Objective 3 - Cash Flow Projections 

N/A - firm not in-scope for this workstream 

Objective 4 - Buffer Monetization and Composition 

Item 

# 

Objective 4 - Information Request 

Buffer Composition 

4.1 Policies and procedures related to buffer asset requirements, HLA/HQLA asset 

allocation and diversification requirements, concentration limits, and haircuts 

pursuant to Reg YY §252.35(b)(3), §252.157(c)(7) and 12 CFR 249.22(a)(4). 

4.2 Detailed buffer segmentation by product type within each HLA/HQLA level 1, 2A and 

2B category at consolidated level as of 9/30/22 and 10/30/22, for each ILST scenario. 

Include dollar amount, maturity, legal entity where the asset is held, asset class type, 

issuer, currency, market value, and haircut details. Please indicate if the assets are 

categorized as AFS or HTM. 

4.3 Describe significant changes, if any, to buffer products (volume and composition) 

over the last two years and the rationale driving these changes. 

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4.4 For HLA/HQLA securities, provide policies and procedures defining qualifying and 

non-qualifying HQLA investments, investment limits and strategies. 

4.5 Identify buffer assets that are pledged as of 9/30/22. 

Buffer Monetization 

4.6 Policies and procedures related to buffer monetization requirements pursuant to 

Regulation YY §252.35(b)(3)(IV)(B), §252.157(c)(7)(IV)(B) and 12 CFR 249.22(a)(4) and 12 CFR 

249.22(a)(1) and SR 10-6 Interagency Policy Statement on Funding and Liquidity Risk 

Management. 

4.7 Provide any analysis used to assess the market's depth and ability to absorb the 

expected monetization of each asset class and channels. 

4.8 Describe the firm's process to periodically monetize a sample of HLA/HQLA. Provide 

details on the monetization methodology and rationale for choosing one method 

over another (sale vs. repo, granularity/frequency/sample size threshold/reporting, 

channels, counterparties, haircuts, and other assumptions). 

4.9 Provide a detailed listing of buffer assets monetized during the past 12 months ending 

9/30/2022 and include the following details: sale or repo, date monetized, asset class 

monetized, legal entity and account where HQLA/HLA was held, haircut used. 

4.10 Describe and quantify the notional for each channel used for repo monetization (i.e., 

number of counterparties and any limits associated). Please identify the type of 

channel used (i.e., blind and counterparty-facing General Collateral Facility, tri-party, 

and bilateral repos). For bilateral monetization channels, provide more detailed 

listing of approved counterparties, notional amounts and any additional information 

available. 

a) Provide any MIS used to monitor the repo borrowing capacity. 

4.11 Describe the assumptions the firm uses when monetizing HTM securities vs AFS 

securities. 

4.12 Identify securities used to collateralize intraday credit as eligible HQLA/HLA and 

provide details, if applicable. 

4.13 Provide the most recent audits and independent review function reviews covering 

the firm's assessment of buffer composition and monetization and any gap 

assessments indicating areas of (mis)alignment between the firm's HLA/HQLA buffer 

and monetization practices and Reg. YY/Reg. W W and/or SR Letter 10-6. 

Contingency Preparedness 

4.14 Provide the most recent CFP for the consolidated organization and, if applicable, 

legal entities updated for the most current contingent sources of liquidity and 

procedures to test them. 

4.15 Provide the firm's analysis of available and alternative funding sources and 

results/conclusions from operational/monetization testing conducted in the last 24 

months. Include support in the submission. 

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4.16 Provide the most recent audits and independent function reviews covering the firm’s 

assessment of contingency preparedness as well as any gap assessments indicating 

areas of (mis)alignment between the firm’s contingency testing/preparedness and 

Reg. YY and /or SR Letter 10-6. 

Objective 5 – FBO Branches 

N/A - firm not in-scope for this workstream 

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