New FSA liquidity rules aim to strengthen UK banking industry

buffers

Early in October, the Financial Services Authority (FSA) published its policy statement Strengthening liquidity standards. The core of the statement lays down clear rules on what constitutes an acceptable ‘liquidity buffer’ in terms of types of assets, amounts to be held and how different banks are going to be treated. The new regime will be easier for smaller and simpler banking firms, who will be able to hold a wider range of qualifying assets (including money-market funds offer