US Bancorp ever more reliant on LCR relief
HQLAs would only cover 91.4% of bank’s net cash outflows without Fed’s cap
US Bancorp’s liquidity coverage ratio (LCR) would have been 863 basis points below the regulatory minimum mandated by the Basel framework at the end of the second quarter in the absence of a waiver granted by the US regulators in 2020 – the largest gap on record.
Under the US Federal Reserve’s tailoring framework, category III banks – those with consolidated assets of between $250 billion and $700 billion – are allowed to apply a 15% discount to net cash outflows (NCOs) when calculating their
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