The European Banking Authority has published its first report on its monitoring of the Liquidity Coverage Ratio implementation in the EU. The LCR has applied as a 100% minimum binding standard across the EU since January 1, 2018, ahead of the Basel implementation date of January 1, 2019. The LCR requirements are set out in the Capital Requirements Regulation and the Capital Requirements Directive, supplemented by the LCR Delegated Regulation (Commission Delegated Regulation (EU) 2015/61). The LCR Delegated Regulation allows national regulators some discretion when implementing the LCR requirements. The EBA's report sets out its observations on the implementation of the LCR, focusing on the level of divergence of implementation of the LCR across the EU. To enhance a more convergent implementation of the LCR, the EBA also provides some guidance for national regulators and banks on operational deposits, retail deposits excluded from outflows and notifications on additional liquidity outflows.
The EBA intends to continue monitoring implementation of the LCR, including the extent to which national regulators and banks apply its guidance incorporated in the report and will assess whether any more formal guidance is needed.
View the EBA's report.