Close

Are you in compliance?

Don't miss out! Sign up today for our weekly newsletters and stay abreast of important GRC-related information and news.

×

Status message

Start your free, no obligation 5-day trial to continue exploring with full access.

Bank Regulators Finalize New Liquidity Requirements

Joe Mont | September 3, 2014

Bank regulators have given the institutions they oversee more clarity, and potentially less onerous standards, regarding the liquid assets they must preserve in anticipation of a crisis. On Wednesday, the Federal Reserve Board, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency finalized a rule that, for the first time, creates a standardized minimum liquidity requirement for large and internationally active banks.

Each institution will be required to hold high quality, liquid assets (HQLA) such as central bank reserves and government and corporate debt that can be converted easily and quickly into cash in an amount equal to or greater than its projected cash outflows minus its projected cash inflows during a 30-day stress period. The ratio of the firm's liquid assets to its projected net cash outflow is its "liquidity coverage ratio," or LCR....

Buy this article for $49, or subscribe to Compliance Week for a month at $149 and get unlimited article access for 30 days.