Our benchmark for capital adequacy is now based on standardized measures of risk and leverage across all banks. This is supplemented by an annual stress test with extensive transparency and disclosure around the process and results that provides additional, consistent risk sensitivity.
We now regulate liquidity as one of our enhanced prudential standards for large banks, with two clear quantitative standards—the short-term liquidity coverage ratio (LCR) and long-term net stable funding ratio (NSFR) requirements—and clear expectations for liquidity risk management, articulated in a regulation that went through a public notice and comment process.