Fed to propose new bank liquidity rules at Oct. 24 meeting

Reuters

WASHINGTON, Oct 17 (Reuters) - U.S. bank regulators plan topropose new liquidity requirements for U.S. banks next week aspart of efforts to implement an international regulatoryagreement, the U.S. Federal Reserve said on Thursday.

International regulators agreed in an accord known as BaselIII to toughen oversight of banks after giant firms failed orneeded bailouts during the 2007-2009 financial crisis.

The agreement called for capital rules to reduce banks'reliance on debt and liquidity rules, which would ensure theyhave enough easy-to-sell assets to weather a crisis.

The Fed and other U.S. bank regulators have already approvedrules to implement the portion of the agreement that governsbank capital. They also proposed certain additional capitalrequirements that went beyond the international agreement.

The Fed said in a statement on its website that it plannedto propose new liquidity rules at its Oct. 24 board meeting.

During the financial crisis, some banks got into troublebecause they did not have enough liquid assets on hand to enduretemporary funding freezes.

Liquidity requirements would aim to prevent a repeat of thisby forcing banks to hold minimum amounts of assets that could besold relatively quickly in a crunch.

The rules initially were supposed to take effect in 2015.International regulators decided in January to give banks moretime out of concern for the global economy.

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