New Liquidity Rule Will Force Big Banks to Shape Up

American Banker
September 4, 2014

The largest U.S. banks will be challenged to comply with the liquidity rule issued Wednesday — and that’s a good thing.

The liquidity coverage ratio requires banks to demonstrate that they hold enough liquid assets to survive for at least 30 days in a period of serious market or credit stress. Fortuitously, its requirements for banks with over $250 billion in assets are stricter than the Basel Committee’s. Going forward, big banks will have to think seriously about what assets they invest in. They will also be compelled to focus on accumulating and validating data and on developing systems that are capable of rapid, accurate calculations and timely reporting to regulators…Read More

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