Federal Regulators Release Liquidity Coverage Ratio Proposed Rule

The Board of Governors of the Federal Reserve System (the "Fed"), the Office of the Comptroller of the Currency (the "OCC") and the Federal Deposit Insurance Corporation (the "FDIC," and together with the Fed and the OCC, the "Bank Regulators") recently approved¹ and published a joint Notice of Proposed Rulemaking (the "NPR") entitled, "Liquidity Coverage Ratio: Liquidity Risk Measurement, Standards, and Monitoring." The NPR proposes to implement in the United States the quantitative liquidity coverage ratio standard established by the Basel Committee on Banking Supervision (the "Basel Committee") as part of the Basel III capital and liquidity reforms ("Basel III").

This memorandum summarizes the NPR, identifies key areas where the NPR deviates from the Basel III standards and provides insight into how the proposal could potentially impact those entities subject to the NPR.