ECB Expresses Concerns with Basel Committee’s Draft LCR
August 29, 2012
The European Central Bank (ECB) is reportedly urging the Basel Committee on Banking Supervision to revise their draft liquidity coverage ratio (LCR) due to concerns that a stronger version may exacerbate the euro crisis by impeding consumer lending. The ECB has expressed support for allowing lenders to use an expanded range of eligible ABS and business loans as part of the required liquidity buffer. As designed, the LCR requires banks to hold sufficient liquid assets to cover a 30-day credit squeeze.
Bloomberg Article Regarding the ECB's Views