FSA imposes new liquidity standards

The Financial Services Authority released strict liquidity standards for banks and investment firms in the U.K. The rules will require financial institutions to significantly reduce their reliance on short-term funding and boost their holding of assets that can be easily sold by £110 billion in the first year. "The FSA is the first major regulator to introduce tighter liquidity requirements for firms," said Paul Sharma, director of prudential policy at the FSA. "We must learn the lessons of the financial crisis, and we believe that implementing tougher liquidity rules is essential to ensure we are in a better position to face future crises."

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