The EBA publishes report on the monitoring of liquidity coverage ratio

The European Banking Authority (EBA) has published its report on the monitoring of liquidity coverage ratio (LCR) implementation in the EU.

Its report highlights the areas it deems require additional guidance for banks and supervisors to foster a common understanding and harmonisation of the liquidity standard. Changes could help to implement a level playing field.

The EBA states it will continue to monitor the space to support the implementation of LCR and will update the reports accordingly.

In the report, the EBA offers guidance on the treatment of fiduciary deposits, LCR optimisation risk, interdependent inflows and outflows and assessment of deposit guarantee schemes conditions for a 3% outflow rates in stable retail deposits.

It also discusses several items in the context of the current pandemic.

The regulator stated it will assess how its guidance is used by banks and supervisors and will take additional steps if needed.

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