Liquidity Coverage Ratio – LCR
The Liquidity Coverage Ratio is dependent upon several factors including the Basel Level. In this section, we explore some basic requirements and the assets included in the LCR calculation.
Under Basel III, level I assets are not discounted when calculating the LCR, while level 2A and level 2B assets have a 15% and 50% discount, respectively. Level I assets include Federal Reserve bank balances, foreign resources that can be withdrawn quickly, securities issued or guaranteed by specific sovereign entities, and U.S. government-issued or guaranteed securities.
Level 2A assets include securities issued or guaranteed by specific multilateral development banks or sovereign entities, and securities issued by U.S. government-sponsored enterprises. Level 2B assets include publicly-traded common stock and investment-grade corporate debt securities issued by non-financial sector corporations.
3% as of BASEL III
5% as for FED insured banks
6% for SIFI (Systematically Important Financial Institutions)
We focus on the proper setup and execution of our collection efforts and processes to achieve LCR preferred by our clients and can provide solutions to meet the requested LCR ratio.