On October 24, 2013, the Board of Governors of the Federal Reserve Board released a Notice of Proposed Rule Making (NPR) that would introduce a liquidity coverage ratio (LCR) requirement that will test a bank’s ability to withstand a liquidity stress period. The proposed rule would apply to banks with $250 billion or more in total assets or with $10 billion or more in balance sheet foreign exposure, as well as to non-banks that are designated as systemically important financial institutions (SIFIs) by the Financial Stability Oversight Council. The rule would also introduce a modified version of the LCR that would apply to depository institution holding companies with $50 billion or more in total consolidated assets and that are not internationally active. The NPR’s LCR is generally similar to the final Basel LCR adopted by the Basel Committee last January, but is more stringent in several important respects.

Please join Mayer Brown attorney Paul Forrester as he addresses the following topics:

  • Material differences between the Proposed Rule and the Final Basel LCR Rule
  • Challenges raised by the NPR’s LCR for the securitization market to consider