Big Pharma Buy Incites U.S. Stocks to Rise
Big Pharma Buy Incites U.S. Stocks to Rise
Valeant Pharmaceuticals International Inc. Offers to Buy Botox Giant Allergan Inc.
Valeant Pharmaceuticals International Inc. Offers to Buy Botox Giant A...
U.S. Stocks Advance
U.S. Stocks Advance
Hedge Funds Lowered Bullish Bets on Gold
Hedge Funds Lowered Bullish Bets on Gold
Job Listings

Banks in U.S. Want Liquidity Rule Eased

 

According to a report from Reuters, banks in the United States want regulators to go easy on a rule that forces the banks to hold large assets that can be tapped into during a crisis in a short period of time.

 

Beginning in January of 2015, banks will need to follow a liquidity coverage ratio (LCR) rule known as Basel III. The banks will be required to have cash or easily-sellable assets to cover a funding squeeze for 30 days.



Get JD Journal in Your Mail
Subscribe to our FREE daily news alerts and get the latest updates on the most happening events in the legal, business, and celebrity world. You also get your daily dose of humor and entertainment!!


 

On Monday, The Clearing House said that compliance with the LCR rule has already reached a little over 80 percent from U.S. banks. Right now, the shortfall is at $840 billion, which is a decrease from $700 billion at the end of 2010. Eight of the 11 banks with Clearing House’s study have a shortfall as of the second quarter in 2012.

 

Clearing House said that if the rule is edited, maybe by relaxing the assumptions used when calculating the required liquidity buffer, the percentage of banks complying would come close to hitting 100 percent.

 

At least 60 percent of the buffer has to be placed in top rated government bonds, according to the LCR rule. The remaining money can be placed in corporate debt. Clearing House also noted that if banks had more flexibility on which assets are eligible, the LCR could be met now.

 

Basel III was written by the Basel Committee, which is made up of banking regulators from 30 countries, including the United States. The committee met recently to talk about easing the restrictions of the LCR rule.

Did you like this? Share it:
Banks in U.S. Want Liquidity Rule Eased by

Tagged: , , ,

Posted by on December 17, 2012. Filed under Business News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.