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Basel Committee Publishes Guidance Regarding Market-Based Indicators of Liquidity

January 13, 2014

On January 12, 2014, the Basel Committee on Banking Supervision published guidance to assist national banking supervisions in implementing the liquidity ratio requirement (LCR) under Basel III.  More specifically, the guidance is intended to assist national banking supervisions in their evaluation of the liquidity profile of assets held by banks and to help promote greater consistency in the implementation of High Quality Liquid Assets (HQLA) classifications across jurisdictions.  The guidance does not change the definition of HQLA under the LCR but, instead, is designed to help supervisors assess whether assets have sufficient liquidity to qualify as HQLA under the LCR.  For a copy of the guidance, please click here.