Regulatory Alerts2018-01-01
Guide to Implementing the Liquidity Coverage Ratio Standard
The Central Bank issued this guide to implement the Liquidity Coverage Ratio (LCR) standard, requiring banks to maintain a minimum ratio of High-Quality Liquid Assets to net 30-day cash outflows of 100% across all significant currencies. The document establishes detailed eligibility criteria, haircut percentages, and concentration limits for Level 1, 2A, and 2B assets while mandating robust daily liquidity monitoring systems and stress scenario assessments tailored to each institution's risk profile. It further specifies precise runoff rates for retail, corporate, and operational deposits, alongside strict rules for calculating net cash outflows and adjusting for secured financing transactions to ensure adequate liquidity buffers during financial stress.