The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu The leading online blog in the fields of corporate governance and financial regulation. Mon, 06 Apr 2026 11:32:10 +0000 en-US hourly 1 https://wordpress.org/?v=6.5.8 https://corpgov.law.harvard.edu/wp-content/uploads/2024/02/cropped-photography-4-e1706898544564-1-32x32.png US Basel III Liquidity Coverage Ratio Proposal – The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu 32 32 US Basel III Liquidity Coverage Ratio Proposal https://corpgov.law.harvard.edu/2013/11/01/us-basel-iii-liquidity-coverage-ratio-proposal/?utm_source=rss&utm_medium=rss&utm_campaign=us-basel-iii-liquidity-coverage-ratio-proposal https://corpgov.law.harvard.edu/2013/11/01/us-basel-iii-liquidity-coverage-ratio-proposal/#comments Fri, 01 Nov 2013 13:04:28 +0000 http://blogs.law.harvard.edu/corpgov/?p=54751?d=20141202162605EST Posted by Margaret E. Tahyar, Davis Polk & Wardwell LLP, on Friday, November 1, 2013
Editor's Note:

Margaret E. Tahyar is a partner in the Financial Institutions Group at Davis Polk & Wardwell LLP. The following post is based on the overview of a Davis Polk visual memorandum; the complete publication, including diagrams, flowcharts, timelines, examples and comparison tables to illustrate key aspects of the US liquidity coverage ratio proposal, is available here.

Overview of U.S. Liquidity Coverage Ratio Proposal

  • The Federal Reserve, OCC and FDIC have issued a proposal to implement the Basel III liquidity coverage ratio (LCR) in the United States.
  • Part of the Basel III liquidity framework, the LCR requires a banking organization to maintain a minimum amount of liquid assets to withstand a 30-day standardized supervisory liquidity stress scenario.
  • The U.S. LCR proposal is more stringent than the Basel Committee’s LCR framework in several significant respects.
  • The U.S. LCR proposal contains two versions of the LCR:
    • A full version for large, internationally active banking organizations.
    • A modified, “light” version for other large bank holding companies and savings and loan holding companies (depository institution holding companies).
  • The proposed effective date is January 1, 2015, subject to a two-year phase-in period.
  • The comment period for the proposal ends on January 31, 2014.

Which Organizations Are Affected?

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