Basel liquidity ratios ‘destructive’ US Senate told

Fed's analysis of NSFR costs "dubious at best", says AEI scholar Paul Kupiec

Capitol Hill in Washington DC
The LCR and NSFR were criticised at a US Senate Banking Committee hearing

A panel of respected academics savaged Basel III's two new liquidity ratios at a US Senate Banking Committee hearing on bank capital and liquidity regulation earlier today (June 7).

The liquidity coverage ratio (LCR) is "about as destructive a regulation as you can imagine", while the cost/benefit analysis behind US federal regulators' net stable funding ratio (NSFR) proposal is "dubious at best", the Senate heard.

"The LCR is ill-conceived and it's not necessary," said Marvin Goodfriend

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