
Explanation:
The 30-day liquidity coverage ratio (LCR) =
Under Basel III, this ratio must equal or exceed 100%.
Net cash outflow = $214 - 487 = -`
Bank's liquidity coverage ratio = \frac{\`236}{\273`} = 0.8645 = 86.45\%
Note that a negative cash outflow implies a net cash inflow.
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Q.3250 Steve Warne is an advisor at a local Bank which is attempting to transition to the new Basel III standards. Specifically, they are wondering if their liquidity and funding ratios meet the updated requirements as specified by the Basel Committee. Given the following information, what is the bank's current liquidity coverage ratio?
$236$107$320$214$487$640$305A
48.46%
B
86.45%
C
206.3%
D
-115.67%
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