3  The liquidity coverage ratio (LCR) requires banks to hold a proportion of their assets in high-quality liquid assets (HQLA). In Australia, only Commonwealth and state government debt are eligible securities as HQLA.
Banks are required to limit their holdings to around 30 per cent of the stock on issue of these assets, to avoid impairing the liquidity in the market of holding higher amounts. BIS central bankers’ speeches  5  Graph 4  Financial sector Gross bond issuance by Australian banks over the past year has been around its average level since 2007.