Banks call for equity to be counted in LCR

A taste for diversification

Arno Kratky

The debate over which assets should be included in the Basel III liquidity coverage ratio (LCR) has for some time resembled a supermarket spat between parent and child. The Basel Committee on Banking Supervision wants the industry to eat its greens, and initially selected a short list of low-yielding, super-healthy assets, dominated by government bonds and cash. Banks contend that the focus on government bonds would cause problems if they had to sell those assets en masse, and in response have

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