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The revised liquidity coverage ratio that was released earlier this month by the Basel Committee will very likely apply to large segments of the U.S. banking industry, once the U.S. regulators complete the anticipated rulemaking. The revised ratio is intended to loosen some of the limitations in the original leverage coverage ratio that the Basel Committee adopted in December 2010, primarily by expanding the types of assets potentially eligible to be treated as liquid assets. The newly includable assets must meet potentially stringent conditions, however, which may have consequences for the markets in which these assets are traded. The speakers will address several topics, including the following:
- Meaning of “high quality liquid assets”—Levels 1, 2A, & 2B;
- Residential mortgage-backed securities as a source of liquidity;
- Use of corporate debt securities for liquidity purposes;
- Treatment of common equity;
- Calculation of net cash outflows; and
- Implementation in the United States.
Speakers: