What is Liquidity Coverage Ratio?
Liquidity Coverage Ratio A regulatory metric under Basel III requiring banks to hold sufficient high-quality liquid assets to cover total net cash outflows over a 30-day stress scenario.
Source: CFA Institute, IFRS Foundation, FASB (GAAP), Basel III Framework
How is “Liquidity Coverage Ratio” Used in Practice?
Banks are required to maintain a Liquidity Coverage Ratio of at least 100% to ensure short-term resilience to liquidity disruptions.
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Who Needs to Know This Term?
- Financial Analysts
- Bankers
- Traders
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What is Liquidity Coverage Ratio?
A regulatory metric under Basel III requiring banks to hold sufficient high-quality liquid assets to cover total net cash outflows over a 30-day stress scenario.
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