European liquidity rules draw in unrated covereds

By Bill Thornhill
16 Oct 2014

The final text of European liquidity rules allows unrated covered bonds into the asset buffers banks must hold, in a move that demonstrates the European Commission's willingness to rely less on the credit rating agencies. Unrated covered bonds sit alongside various categories of securitization in the European version of the rules, which allow far more assets to be considered liquid than originally envisaged by the Basel Committee.

Last Friday, the European Commission published the final revision of bank liquidity rules, following a process begun by the Basel Committee in 2010. The EC’s Delegated Act on the Liquidity Coverage Ratio (LCR), which is the commission's final verdict on the European Banking Authority's recommendations, had been widely ...

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