BIS central bankers’ speeches  1  crisis (the LCR) and to reduce the inherent maturity mismatch in banks’ balance sheets (NSFR)2 In specifying the LCR, the Basel Committee on Banking Supervision (BCBS) has focussed on the need for banks to hold high quality liquid assets (HQLAs) that will remain liquid in private markets, even in a crisis situation.
This essentially means that the bulk of LCR assets must be public sector securities that are “traded in large, deep and active repo or cash markets.” The aim clearly is to base the standard on the best available liquid assets and to achieve cross-border consistency for internationally active banks. However, for many countries, this model does not fit.