EBA · 2013_293 Final Q&A

Minimum reserve requirement

Regulation
Regulation (EU) No 575/2013 (CRR)
Article
412, para. 1
Topic
Liquidity risk
Submitted by
Industry association
Submitted
2013-09-30
Answered
2014-07-04
Answer provided by
ESAs (EBA, ESMA, EIOPA)
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Question

What is the requirement to maintain the minimum reserve requirement within the LCR period, i.e. does the LCR have to be met for each of the 30 days in the stress horizon?

Background

NA

Answer

In accordance with Article 412(1) of Regulation (EU) No. 575/2013 (CRR) institutions shall hold liquid assets, the sum of the values of which covers the liquidity outflows less the liquidity inflows under stressed conditions so as to ensure that institutions maintain levels of liquidity buffers which are adequate to face any possible imbalance between liquidity inflows and outflows under gravely stressed conditions over a period of 30 days.  As a consequence, the liquidity coverage requirement shall apply at all times. During times of stress, institutions may use their liquid assets to cover their liquidity outflows in accordance with the circumstances specified in Article 414 of the CRR.

Original source: European Banking Authority, Q&A ID 2013_293

This Q&A is published by European Banking Authority and is non-binding. It does not constitute legal advice. Updated weekly from official ESA sources.

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