Basel Lightens LCR Requirements
A press release entitled, "Work on the Liquidity Coverage Ratio finalised by the Basel Committee," says, "In January 2013, the Basel Committee's oversight body, the Group of Governors and Heads of Supervision (GHOS), agreed the final form of Basel III's Liquidity Coverage Ratio (LCR). At that time, the GHOS asked the Committee to undertake some additional work on liquidity disclosure, the use of market-based indicators of liquidity within the regulatory framework, and the interaction between the LCR and the provision of central bank facilities. The Committee has completed this work, and has today published a package of material that responds to these requests. The Committee has today issued final requirements for banks' LCR-related disclosures. These requirements will improve the transparency of regulatory liquidity requirements and enhance market discipline. Consistent with the Basel III agreement, national authorities will give effect to these disclosure requirements, and banks will be required to comply with them, from the date of the first reporting period after 1 January 2015. The Basel Committee also published today Guidance for Supervisors on Market-Based Indicators of Liquidity. This document was published to assist supervisors in their evaluation of the liquidity profile of assets held by banks, and, for the purposes of Basel III's LCR, to help promote greater consistency in High Quality Liquid Assets (HQLA) classifications across jurisdictions. Importantly, the guidance does not change the definition of HQLA within the LCR; rather, it helps supervisors assess whether assets are suitably liquid for LCR purposes."
