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On Thursday, the Office of the Superintendent of Financial Institutions (OSFI) issued revised guidance that sets out its expectations for banks when it comes to managing liquidity risk.

The updated guidance aims to address the increased complexity of both measuring and managing liquidity risk. OSFI first issued its guidance in this area in 2012.

Additionally, OSFI said that its supervisory efforts have revealed liquidity risk management practices at certain institutions need improvement.

The updated guidance takes effect Jan. 1, 2020.