Large Bank Examination Workshop February 2026

Liquidity Coverage Ratio (LCR) • Under LCR banks are required to hold “High Quality Liquid Assets” (HQLA) in an amount to withstand liability run-off during a 30-day stress period. • HQLA takes the form of:  Currency/Reserves (traditional measure of “liquidity buffer” )  Sovereign bonds (with restrictions)  Corporate bonds/Covered bonds (with restrictions)  RMBS/Common Equity (with restrictions) • LCR recognizes expansion of both liabilities that require a liquidity buffer and assets that can provide meaningful liquidity in times of stress

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High Quality Liquid Assets (HQLAs)

Fundamental Characteristics: • Low risk

• Ease and certainty of valuation • Low correlation with risky assets • Listed on a developed and recognized exchange • Active and sizable market • Low volatility

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