We have prepared a blackline that compares the Basel Committee’s January 2014 final Basel III liquidity coverage ratio (LCR) disclosure standards to its July 2013 proposed disclosure standards. The Basel Committee expects national regulators to implement the LCR disclosure standards by January 1, 2015, so that banking organizations in their jurisdiction may begin making disclosures in 2015.
Background: Today, the Basel Committee finalize its Pillar 3 disclosure standards for the Basel III LCR. Our blog post summarizing the Basel Committee’s July 2013 proposed disclosures standards is available here. Part of the Basel III liquidity framework, the LCR requires a banking organization to maintain a minimum amount of liquid assets to withstand a short-term liquidity stress period. Specifically, the LCR requires a banking organization’s stock of unencumbered high-quality liquid assets (HQLAs) to be at least 100% of its total net cash outflows over a 30-day standardized supervisory liquidity stress scenario.
U.S. Implementation: In October 2013, the U.S. banking agencies issued a proposal to implement the LCR in the United States for large U.S. banking organizations and certain nonbank financial companies designated as systemically important by the Financial Stability Oversight Council (FSOC). In the U.S. LCR proposal, the U.S. banking agencies stated that they plan to issue a separate proposal addressing regulatory reporting and disclosure requirements for the LCR. Our visual memo on the U.S. LCR proposal is available here.
Basel Committee, Liquidity coverage ratio disclosure standards (Jan. 2014) available here: http://www.bis.org/publ/bcbs272.pdf