The three US bank regulatory agencies issued a final regulation implementing the Basel III Liquidity Coverage Ratio (LCR) which requires banking organizations to maintain a minimum amount of liquid assets in order to meet short-term liquidity needs. The LCR is to be phased in over a three-year period beginning in January 2015. In the EU, the LCR standards have already been implemented although further technical details remain to be fleshed out by secondary legislation ahead of January 2015.

The Regulation adopted by the Office of the Comptroller of the Currency (“OCC”), Board of Governors of the Federal Reserve System (“Fed”), and Federal Deposit Insurance Corporation (“FDIC”) (collectively the “US Supervisors”) is a requirement of Section 165 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. It applies to the largest US banking organizations which are, in general, those with $250 billion or more in consolidated assets and $10 billion or more in foreign exposures. A modified version applies to those US banking organizations with $50 billion or more in consolidated assets. Non-US banking organizations are not covered by the Regulation but are expected to be subject to the similar requirements in the future.