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Liquidity Coverage Ratio: Treatment of U.S. Municipal Securities as High-Quality Liquid Assets

The proposed rule would include as level 2B liquid assets under the LCR general obligation securities of a public sector entity that meet the same criteria as corporate debt securities that are included as level 2B liquid assets, subject to limits that are intended to address the unique structure of the U.S. municipal securities market. The proposed rule would apply to all Board-regulated institutions that are subject to the LCR, which include: (1) bank holding companies, certain savings and loan holding companies, and state member banks that, in each case, have $250 billion or more in total consolidated assets or $10 billion or more in on-balance sheet foreign exposure; (2) state member banks with $10 billion or more in total consolidated assets that are consolidated subsidiaries of bank holding companies described in (1); and (3) nonbank financial companies designated by the Financial Stability Oversight Council for Board supervision to which the Board has applied the LCR by rule or order. The proposed rule would also permit bank holding companies and certain savings and loan holding companies, in each case with $50 billion or more in total consolidated assets, that are subject to the Board’s modified liquidity coverage ratio to rely on the proposed expanded definition of HQLA. Click here to see the proposed rule

  • July 24, 2015
  • Time: All Day
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