Banking Agencies Provide Guidance On Liquidity Coverage Ratio

The Office of the Comptroller of the Currency ("OCC"), the Board of Governors of the Federal Reserve System ("FRB") and the FDIC published frequently asked questions ("FAQs") on the Liquidity Coverage Ratio ("LCR") rule. The rule was adopted in September 2014. The LCR rule imposes a quantitative liquidity requirement on banks with at least $10 billion in total consolidated assets that are consolidated subsidiaries of internationally active banking organizations.

The FAQs were developed by the agencies based on questions received concerning the applicability of the LCR rule in particular situations. They address questions concerning, among other relevant subjects, outflow amounts, maturity determinations, the treatment of inflows, and demonstrating the ability to monetize through securities lending transactions.