US Banking Regulators Adopt Final Rule To Impose Liquidity Coverage Ratio On Large US Banking Institutions

Keywords: Federal Reserve System, FRB, Final Rule, FDIC

The Board of Governors of the Federal Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC—and, together with the FRB and FDIC, Agencies), have each adopted a final rule (the Final Rule¹) to impose a quantitative liquidity coverage ratio (LCR) requirement on US banking organizations with total consolidated assets of $250 billion or more, or total consolidated on-balance sheet foreign exposure of $10 billion or more, and their subsidiary depository institutions with $10 billion or more of total consolidated assets (collectively, Covered Companies).

Adopted by the Agencies on September 3, 2014, the Final Rule requires Covered Companies to maintain a sufficient amount of unencumbered high quality liquid assets (HQLA) to meet 100 percent of their projected cash outflows over a stressed 30-day period. A simpler, less stringent LCR applies to