US ‘transfer restrictions’ take a bite out of UBS’s LCR
Overseas subsidiaries are holding more HQLA to meet local liquidity requirements
UBS’s liquidity profile worsened in the third quarter as more of its low-risk assets became trapped at overseas subsidiaries.
The Swiss bank’s liquidity coverage ratio (LCR) – which is calculated by dividing its stock of high-quality liquid assets by its estimated net cash outflows – dipped to 135% from 144% at the end of June.
HQLA fell $7 billion to $174 billion, while net cash outflows rose $3 billion to $129 billion.
The bank said the reduction in HQLA was “primarily driven by an
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