In January 2013, changes to the LCR were announced. In particular, the timetable for fully phasing in the LCR requirement has been extended from 2015 to 2019. Additionally, the list of HQLA has been broadened and punctual recalibration of the net cash outflows will give banks more time to recover from the crisis and to implement the LCR in a more orderly manner.
This will likely reduce the level of market fragmentation that might otherwise have arisen had all banks had to meet the LCR 100% requirement by 2015. In general, Basel III is the right answer to the lessons learned from the crisis. Nonetheless, its impact on market patterns and banking behaviour has to be monitored carefully to prevent undesirable developments. 4.