Appendix 1: Alternative liquidity approaches under the LCR The following describes how some countries are implementing Alternative Liquidity Approaches under Basel III. Australia – the RBA and APRA have introduced a “Committed Liquidity Facility” (CLF) that provides an insurance overlay to otherwise “low quality” liquid assets, at a cost of 15 basis points per annum.
The CLF will be sufficient in size to cover the shortfall between a bank’s holdings of HQLA and its LCR needs. Qualifying collateral for the facility will comprise all assets eligible for repurchase transactions with the RBA under normal market operations and other assets the RBA deems appropriate (including self-securitisations).