In an open meeting held at the end of October 2013, the US Federal Reserve presented draft proposals to implement the liquidity coverage ratio (LCR). This is one of the key components of the Basel III global bank regulation accords. The proposals include 76 questions, with a deadline of January 31,2014 for responses from the market.Crucially, the US LCR would apply not just to internationally active banks - as recommended by the Basel Committee on Banking Supervision (BCBS) - but also to any domestic US bank with assets totalling more than $50bn. The requirements for these smaller banks would be diluted, including a liquidity stress scenario of 21 days rather than 30 days for the systemic banks.
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