Effective date for FRB LCR requirements for large banking organizations

The Federal Reserve Board has finalized a rule that will expand the range of assets large banking organizations may use to satisfy regulatory liquidity coverage ratio ("LCR") requirements designed to ensure that these banking organizations have the capacity to meet their liquidity needs during a period of financial stress. The final rule allows investment-grade, U.S. general obligation state and municipal securities to be counted as high-quality liquid assets (HQLA) up to certain levels if they meet the same liquidity criteria that currently apply to corporate debt securities. The limits on the amount of a state's or municipality's securities that could qualify are based on the liquidity characteristics of the securities. The final rule, which will be effective on July 1, 2016, applies only to institutions supervised by the Federal Reserve and subject to the LCR requirement.

Top Story, 4/4/16