Clifford Chance
US Banking Regulators Implement the Basel III Liquidity Coverage Ratio
11 September 2014
On September 3, 2014, the Federal Reserve Board, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation adopted a final rule implementing a quantitative minimum liquidity coverage ratio requirement for the largest, internationally active US banking organizations. The Final Rule is generally consistent with the LCR standard established by the Basel Committee on Banking Supervision, although it differs in some respects from the standard adopted by the Basel Committee. Under the Final Rule, "covered companies" generally will be required to maintain a minimum amount of unencumbered high-quality liquid assets that is equal or exceeds estimated net cash outflows over a 30-day standardized supervisory liquidity stress scenario.
