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Basel-ii Framework On Liquidity Standards
What is the primary objective of the Basel-II framework on liquidity standards?
The primary objective is to ensure that banks maintain adequate liquidity buffers to survive periods of financial stress, promoting resilience of the banking sector to liquidity disruptions.
What is the minimum LCR requirement for Domestic Systemically Important Banks (D-SIBs)?
D-SIBs must maintain LCR of 100% at all times.
What does the Liquidity Coverage Ratio (LCR) measure?
LCR measures a bank's ability to meet short-term liquidity needs over a 30-day stress period by holding sufficient High-Quality Liquid Assets (HQLA) to cover total net cash outflows.
What is the time horizon covered by the Net Stable Funding Ratio (NSFR)?
NSFR covers a one-year time horizon for stable funding.
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