Banks Prepare For LCR Final Rule

The Final Rule for the Liquidity Coverage Ratio (LCR) is will go into effect in just a couple of weeks, and while it won’t be fully phased-in for a couple of years, large banks have to start dealing with a rule that in many ways is stricter than the guidelines set out by Basel III.

“As with U.S. regulators’ implementation of other Basel Committee initiatives, the LCR Final Rule is in certain key respects more stringent than the international standard. For example, the LCR has a shorter phase-in period than the Basel equivalent, and certain asset classes are treated less favorably by the Final Rule than by the Basel standards,” writes the law firm Debevoise & Plimpton LLP in a...