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Regulations

Basel III Framework for Liquidity Coverage Ratio (LCR)

Aimed at strengthening the short-term liquidity position of banks, the BSP adopted Basel III's Liquidity Coverage Ratio (LCR) under Circular No. 905 dated 10 March 2016. The new liquidity rule requires banks to have available High Quality Liquid Assets (HQLA) to meet anticipated net cash outflow for a 30-day period under stress conditions. The standard, which initially covers universal and commercial banks, prescribes that, under a normal situation, the value of the liquidity ratio be no lower than 100% on a daily basis because the stock of unencumbered HQLA is intended to serve as a defense against potential onset of liquidity stress. The guidelines provide for an observation period from 01 July 2016 to end-2017. During the observation period, no minimum ratio has to be complied with. However, to encourage transitioning internally to the new standard and to monitor level of compliance, banks are required to submit quarterly reports to the BSP.

Originating Circular of the Basel III Framework for LCR

Circular No. 905

03.10.2016

Implementation of Basel III Framework on Liquidity Standards - Liquidity Coverage Ratio and Disclosure Standards

Other Amendments to the Framework

Reportorial Requirements

News Releases


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