The LCR Proposal: Questions and Answers

1 November 2013
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Key takeaways:

  • The Federal Reserve, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency have released a proposed rule that would apply a Liquidity Coverage Ratio to large and internationally active U.S. banking organizations.
  • The Proposed Rule would be “super-equivalent” to the Liquidity Coverage Ratio finalized earlier this year by the Basel Committee on Banking Supervision, by including a shorter phase-in period and providing for more stringent treatment of certain asset classes than the Basel standard.
  • The Proposed Rule would, for the first time, require U.S. banking organizations to meet minimum quantitative liquidity standards and thus, represents an important milestone in the post-crisis regulatory reform process.