Liquidity Network: A Cooperative Bank-to-Bank Network

The Liquidity Network is a cooperative bank-to-bank network established in February 2009 to provide an additional funds management tool for BankIn Minnesota member banks. BankIn Minnesota provides a communication link between Network members who have available liquidity with those members who may have emergency, short-term funding needs.

BankIn Minnesota 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 BankIn Minnesota 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 BankIn Minnesota member banks. To become a member, contact Jim Amundson for additional information.

The Network currently consists of 137-member banks and is tested at least annually 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 BankIn Minnesota Liquidity Network’s most recent test was on December 20, 2023. 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 6.00% APY on a 30-day certificate of deposit.

In summary, the test took place from 11:00 a.m. to 2:30 p.m. with a total of 59 banks responding with available funding of $18,074,500. Thirty banks responded within 60 minutes with available funding of $7,615,500. 

Given the consistency of the test results over the past several years, we 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.

Previous test results have highlighted the number of banks responding within 15 minutes. This information will no longer be reported becasue it implies speed or immediacy. It would realistically take longer to open a large number of CDs and get the money moved. We encourage each bank to estimate that timeframe internally. How long does it take to open a CD and get the funds transferred and posted? From there we encourage banks to quantify a dollar amount related to the Liquidity Network to include in your contingency funding plan and then do the math to determine the timing of the funding. We believe this will provide a more realistic assessment of where the Liquidity Network fits in with a bank's contingency funding plan.

How does BankIn Minnesota ensure the networks remains ready for funding requests?

BankIn Minnesota 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 [email protected].