Banks aren’t holding enough liquid assets

Banks’ access to easily sellable assets aren’t up to snuff under new liquidity rules, reports Bloomberg.

Under the liquidity coverage ratio, which was part of the Basel reforms, banks are US$456 billion short. But they still have time to build their nest eggs – the rule doesn’t come into full force until 2019. Liquidity requirements are being phased in, says Bloomberg. As of Jan. 1, 2015, banks must have 60% of their total required liquidity.

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The Basel Committee on Banking Supervision says if the new standard had been in effect at the end of 2013, a quarter of the more than 200 banks it surveyed would not have met their liquidity commitments.

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The staff of Advisor.ca have been covering news for financial advisors since 1998.