EBA data reveals disparities in LCR deposit-bucketing

Regulatory arbitrage concerns surface over classification of non-operational deposits

Banks use differing methods to classify wholesale deposits for the purpose of the liquidity coverage ratio (LCR), the European Banking Authority reports. This could mean the Basel Committee-mandated measure of funding risk is not comparable between member states and lenders.

Wholesale deposits represented 46% of the aggregate cashflows of 192 banks surveyed by the EBA as of June 30, 2018, of which 38% are classified as non-operational deposits and 8% as operational deposits.

The LCR is found

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