Basel Committee considers use of credit ratings in LCR shake-up

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Credit ratings could be used to determine which sovereign bonds are eligible for the Basel Committee on Banking Supervision's new liquidity coverage ratio (LCR), according to sources close to the issue. A Basel working group is also considering scrapping the distinction between so-called level 1 and level 2 assets. These changes, if implemented, would represent the biggest adjustments to the LCR since it was first proposed in December 2009. Meant to ensure banks hold sufficient high-quality,