In principle, this should make certain that banks have a sufficient quantity of liquid assets so as to be able to withstand up to a month-long period of sustained and severe liquidity stress. For illustrative purposes, let us consider what would have been the evolution of the LCR in the context of Luxembourg’s financial sector.
17 Additional precautionary measures were implemented in the supervision of banks. 18 The most successful of these measures was the limit of one-third imposed in May 2011 on the share of any housing loan indexed in effect to the Bank of Israel interest rate.