The key targets here are the planned reduction in the loan-to-deposit ratio to 122.5 per cent (from an average starting level of close to 180 per cent) and the requirement for banks to meet specified targets to fund a greater proportion of their lending activities with stable, long-term funding.
Deleveraging is to be achieved through the identification and sale of non-core assets, mainly foreign-held assets. In this way, the impact of deleveraging on the domestic economy should be minimised. To the extent that assets can be sold outright then bank recourse to official funding can be reduced.