Basel Committee on Banking Supervision reforms - Basel III Liquidity Global liquidity standard and supervisory monitoring Liquidity coverage ratio The liquidity coverage ratio (LCR) will require banks to have sufficient high-quality liquid assets to withstand a 30-day stressed funding scenario that is specified by supervisors. Net stable funding ratio The net stable funding ratio (NSFR) is a longer-term structural ratio designed to address liquidity mismatches. It covers the entire balance sheet and provides incentives for banks to use stable sources of funding. Principles for Sound Liquidity Risk Management and Supervision The Committee's 2008 guidance entitled Principles takes account of lessons learned during the crisis and are based on a fundamental review of sound practices for managing liquidity risk in banking organisations. Supervisory monitoring The liquidity framework includes a common set of monitoring metrics to assist supervisors in identifying and analysing liquidity risk trends at both the bank and system-wide level. Containing leverage Risk coverage Securitisations Strengthens the capital treatment for certain complex securitisations. Requires banks to
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This note was uploaded on 03/01/2012 for the course FINS 3630 taught by Professor Yip during the Three '09 term at University of New South Wales.