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Basel-III Framework On Liquidity Standards
What is the primary objective of the Basel-III liquidity framework introduced by the Basel Committee?
The primary objective is to ensure that banks maintain an adequate level of unencumbered, high-quality liquid assets to survive a significant stress scenario lasting 30 calendar days, thereby promoting short-term and long-term resilience of banks' liquidity risk profiles.
What is the minimum NSFR requirement that banks must maintain under Basel-III?
Banks must maintain NSFR of at least 100%.
What does LCR stand for in the Basel-III liquidity framework?
LCR stands for Liquidity Coverage Ratio, which requires banks to hold sufficient High-Quality Liquid Assets (HQLA) to cover total net cash outflows over a 30-day stress period.
What is the stress scenario period assumed in the LCR calculation under Basel-III?
LCR assumes a 30-day stress scenario period.
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