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The European Banking Federation (EBF) welcomes the revisions to the Liquidity Coverage Ratio (LCR) just endorsed by the Group of Governors and Heads of Supervision (GHOS), the oversight body of the Basel Committee on Banking Supervision (BCBS). The EBF agrees with the GHOS that the LCR is an essential component of the Basel III reforms. It stresses that it has been one of the key concerns for Europe’s banks in the Basel III proposals, where the initial definition would have impacted most severely the capacity of banks to support economic recovery. The changes incurred by the revision of the LCR, which expands the range of assets eligible as High Quality Liquid Assets (HQLA), will facilitate the selection of liquid assets for banks.
Banks would otherwise have to draw...
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