Basel treads water until 2019
07 January 2013 Switzerland
Image: Shutterstock
After a Switzerland summit that saw bankers heatedly lobbying for more relaxed reforms, banks now have until 2019 to achieve a liquidity coverage ratio (LCR).
The Basel Committee on Banking Supervision also announced that more assets would now be considered liquid, such as corporate bonds and some shares.
New rules will still come into play on 1 January 2015, with the proviso that lenders will only need to prove that they hold 60 percent of the required ratio.
Nigel Willis, partner at Deloitte, said: “The implementation of the LCR is an important step towards the creation of a global framework for bank liquidity. These initial minimum standards should be further enhanced when negotiations regarding the Net Stable Funding Ratio are concluded."
“The combination of a phased implementation timetable for the LCR, broader definition of what constitutes a liquid asset and confirmation that a bank’s stock of liquid assets can be used in times of stress, strikes a welcome balance between the competing demands of raising regulatory standards to increase confidence in the global financial system, and not impeding the recovery of the global economy.”
The Basel Committee on Banking Supervision also announced that more assets would now be considered liquid, such as corporate bonds and some shares.
New rules will still come into play on 1 January 2015, with the proviso that lenders will only need to prove that they hold 60 percent of the required ratio.
Nigel Willis, partner at Deloitte, said: “The implementation of the LCR is an important step towards the creation of a global framework for bank liquidity. These initial minimum standards should be further enhanced when negotiations regarding the Net Stable Funding Ratio are concluded."
“The combination of a phased implementation timetable for the LCR, broader definition of what constitutes a liquid asset and confirmation that a bank’s stock of liquid assets can be used in times of stress, strikes a welcome balance between the competing demands of raising regulatory standards to increase confidence in the global financial system, and not impeding the recovery of the global economy.”
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