European System of Financial Supervision and Liquidity Coverage Ratio: Difference between pages

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''European Union (EU).''
''Bank regulation''


(ESFS).
(LCR).


The ESFS comprises:
The LCR is a requirement under Basel III for a bank to hold high-quality liquid assets (HQLAs) sufficient to cover 100% of its net cash requirements over 30 days.  
*The three European Supervisory Authorities (ESAs), the EBA, ESMA and EIOPA;
*The Joint Committee of the ESAs;
*The European Systemic Risk Board (ESRB);
*The European Central Bank; and
*The supervisory authorities of each member state.


It applies throughout the European Union.


The purpose of the ESFS is to support the efficient functioning of the European internal market by harmonising regulation and supervision in each member state.
The LCR has been implemented in stages from 2015, to reach the 100% requirement by January 2019.
 
 
It reduces the value to a bank of cash deposits of less than 30 days tenor because they are only worth the income on the HQLAs if a bank forecasts no short term cash receipts to cover repayment.
 
The purpose of this requirement is to ensure that banks can manage stressed market conditions, under which the bank is assumed to suffer substantial outflows of the cash previously deposited with it.




== See also ==
== See also ==
* [[Bank of England]]
* [[Bank supervision]]
* [[Basel III]]
* [[Basel III]]
* [[EBA]]
* [[EIOPA]]
* [[ESMA]]
* [[European Central Bank]]
* [[European Supervisory Authority]]
* [[European Systemic Risk Board]]
* [[European Union]]
* [[European Union]]
* [[Euro zone]]
* [[Net Stable Funding Ratio]]
* [[Federal Reserve System]]
* [[Cash investing in a new world]]
* [[Financial Services Authority]]
* [[HQLA]]
* [[Financial Conduct Authority]]
* [[Level 1 liquid assets]]
* [[Home supervisor]]
* [[Level 2 liquid assets]]
* [[Host supervisor]]
* [[Leverage Ratio]]
* [[Internal Market]]
* [[Liquidity buffer]]
* [[Prudential Regulation Authority]]
* [[Liquidity risk]]
* [[Supervisory college]]
* [[LR]]
* [[OLAR]]
* [[Pillar 1]]
* [[Required Stable Funding]]
* [[Survival period]]
 
[[Category:Compliance_and_audit]]
[[Category:Liquidity_management]]

Revision as of 11:58, 17 November 2016

Bank regulation

(LCR).

The LCR is a requirement under Basel III for a bank to hold high-quality liquid assets (HQLAs) sufficient to cover 100% of its net cash requirements over 30 days.

It applies throughout the European Union.

The LCR has been implemented in stages from 2015, to reach the 100% requirement by January 2019.


It reduces the value to a bank of cash deposits of less than 30 days tenor because they are only worth the income on the HQLAs if a bank forecasts no short term cash receipts to cover repayment.

The purpose of this requirement is to ensure that banks can manage stressed market conditions, under which the bank is assumed to suffer substantial outflows of the cash previously deposited with it.


See also