Liquidity Network: A Cooperative Bank-to-Bank Network
The ICBM Liquidity Network is a cooperative bank-to-bank network established in February 2009 to provide an additional funds management tool for ICBM member banks. ICBM provides a communication link between Network members who have available liquidity with those members who may have emergency, short-term funding needs.
ICBM is responsible for maintaining network member-contact information. Participating banks are not legally bound to provide funding or even respond to requests as part of their participation in the Network. There is no fee assessed by ICBM in conjunction with hosting the Network and all funding terms, pricing, documentation and other conditions are negotiated directly between participating members.
How many banks participate?
The Liquidity Network is open to all ICBM member banks. To become a member, print the Liquidity Network Agreement and fax it to ICBM at 651-687-9387, or contact Jim Amundson for additional information.
The Network currently consists of 150-member banks and is tested at least twice per year to assure its effectiveness as a source of funding and to validate the availability of funds for Network members.
When was the network last tested and what were the results?
The ICBM Liquidity Network’s most recent test was on November 4, 2019. This test, once again, assumed the likely reality that the bank seeking funding is less than well capitalized and subject to FDIC rate caps. Therefore, the offer was 0.86% APY on a 30-day CD.
In summary, the test took place from 10:15 a.m. to 3:00 p.m. with a total of 77 banks responding with available funding of $18,821,500. Twenty-six banks responded within 15 minutes with available funding of $6,760,500 and 59 banks responded within 60 minutes with available funding of $14,779,500.
Given the consistency of the test results over the past several years, I remain confident the Liquidity Network could successfully meet emergency funding requests and should be included in your Contingency Funding Plan as a reliable funding source.
How does ICBM ensure the networks remains ready for funding requests?
ICBM manages the network contact list and ensures liquidity requests reach the primary contact at participating banks.
During our latest test, individuals listed as “primary contacts” received an e-mail. Primary contacts who would like to update their information can contact Jim Amundson at the email below.