The Federal Reserve has proposed new liquidity requirements that go beyond those set by Basel III, according to a statement released by the central bank on Thursday.
The proposal sets a standard minimum liquidity coverage ratio for international banking organizations, which the Fed defines as those with “$250 billion or more in total consolidated assets or $10 billion or more in on-balance sheet foreign exposure”, according to a statement. The proposal requires banks to maintain liquidity in an amount equal to or greater than its projected cash outflows minus its projected cash inflows during a short-term stress period.
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