Basel III introduced two required liquidity ratios. Choose from the options given below

Q1- 15 July 2017.png

Answer: C. I and III

In December 2010, the Basel committee introduced liquidity standards as a part of
the Basel III capital regime, including the Liquidity Coverage Ratio (LCR) and the Net
Stable Funding Ratio (NSFR).

The effect was to increase banks’ short- and long-term resilience.

The LCR addresses whether banks have adequate high-quality assets to survive stressed liquidity conditions over a 30-day period.

The NSFR guides banks to adopt resilience over long-term time horizons by creating more incentives for financial institutions to fund their activities with more stable sources of funding on an ongoing structural basis.

Learn more: 

  1. Liquidity Coverage Ratio: Implications and a Pragmatic Approach to Implementation
  2. Basel III summary
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