It is important to emphasise that DLC is a complement to stress tests and the existing liquidity metrics prescribed in the Capital Requirements Regulation. DLC is not a scenario and is thus not an assessment of how a bank would cope in a stressed situation. The metric does not take account of, for instance, the degree of stability of different types of deposits, contingent outflows, the fact that some customers cannot meet their payment obligations, whether customers utilise their credit lines or whether customers expect certain loans to be rolled over. DLC rather indicates the degree of independence of a bank in the event of a liquidity crisis.

Like many other metrics, DLC consists of only one figure – in this case, a figure that provides an indication of a bank’s liquidity risk. If the metric indicates a high liquidity risk, it is also important to identify when that risk arises to enable assessing its severity. If the metric indicates low liquidity risk, however, this information is of less significance.