Basel III liquidity-coverage ratio is a concern in Asia

05/1/2011 | Risk.net (subscription required)

The Basel III liquidity-coverage ratio requires banks to hold a certain amount of high-quality liquid assets, such as cash and government bonds. However, a shortage of eligible assets presents a challenge for Asian lenders. The Basel Committee on Banking Supervision is considering options, such as allowing the use of foreign-currency sovereign bonds, but such alternatives have their risks, according to Risk magazine.

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