What is the purpose of the Liquidity Coverage Ratio?

Last Updated on January 28, 2022 by Admin 3

What is the purpose of the Liquidity Coverage Ratio?

  • to mitigate market replacement risk across markets
  • to eliminate funding mismatches by establishing a minimum acceptable amount of stable funding
  • to ensure that banks have enough high-quality liquid assets to survive a 30-day period of acute market stress
  • to minimize duration risk on a bank’s assets over a one-year horizon
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