South African banks push for central bank liquidity facility to help LCR compliance

A central bank liquidity facility is a possible solution to the shortage of liquid assets, says a Banking Association South Africa speaker at Risk and Return 2012 in Cape Town

South African banks are lobbying for the South African Reserve Bank (Sarb) to set up a liquidity facility that will help provide them with enough eligible assets to comply with the new Basel III liquidity coverage ratio (LCR).

"We are hoping to see Sarb provide a liquidity facility to the banks at a market-related price that should enable the banks to acquire the necessary assets without impacting too severely on the market," said Mark Brits, general manager of the Banking Association South