Morgan Stanley’s LCR suffers in Q3 on rise in cash outflows

Morgan Stanley’s liquidity coverage ratio (LCR) dipped the most among big US banks in the third quarter of this year.

The New York-based lender saw its LCR drop 14 percentage points to 140% in the three months to end-September.

The fall was caused by an increase in projected net cash outflows (NCO), which make up the denominator of the ratio. These climbed $12 billion (10.6%) quarter on quarter, far outpacing the growth of high-quality liquid assets (HQLA), which make up the ratio’s numerator.

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