The UK’s Financial Services Authority stoked controversy last month with the announcement of its new rules on UK bank liquidity. Perhaps conscious of the stinging criticism it attracted for its light-touch regulation before the crisis, the FSA is first out of the gate among the main regulators on liquidity changes.
Under the new rules banks must hold a buffer of easily saleable securities. These should be unencumbered, banks will have to test market liquidity by periodically churning the buffer and liquidity management will be separated at entity level – requiring each subsidiary to be self-sufficient.
Access intelligence that drives action
To unlock this research, enter your email to log in or enquire about access
