Agencies Issue Final Rule Implementing S.2155 LCR Adjustment

The federal banking agencies today issued a final rule implementing an ABA-advocated provision of S. 2155 that expands the pool of what counts as high-quality liquid assets under the Liquidity Coverage Ratio.

The final rule—which was unchanged from an interim final rule issued by the agencies last August—treats liquid, readily marketable and investment-grade municipal securities as HQLA for the purposes of the LCR, one of the Basel III liquidity regimes. Included in the S. 2155 regulatory reform bill, this bipartisan provision has been advocated by ABA for years and introduced as standalone legislation in several previous Congresses.