The House today agreed by voice vote to pass H.R. 2209. The bill, which is part of ABA’s Agenda for America’s Hometown Banks, would further expand the ability of banks to count municipal securities as high-quality liquid assets under the Liquidity Coverage Ratio.
“ABA has long argued that the high quality nature of municipal securities should be recognized under the LCR and that discouraging bank investment in municipal securities would make funding for state and local entities more expensive and difficult,” ABA said in a memo sent to House members today. The association added that “allowing a more diverse set of assets will strengthen the credibility of the LCR by ensuring that the definition of HQLA incorporates the significant variety of liquidity sources that banks have safely relied upon in the past.”