Global regulators agree on bank asset rules
BERLIN (AP) — International banking regulators have agreed on rules meant to ensure banks keep enough cash in hand to survive future market crises.
The body that oversees the Basel Committee on Banking Supervision, which sets international rules, said Sunday the so-called "liquidity coverage ratio" will be phased in from the beginning of 2015 and take full effect four years later.
Banks will have to hold enough cash, and easily sellable assets, to tide them over during an acute 30-day crisis.
The oversight body's head, Mervyn King, said the timeframe ensures the new standards "will in no way hinder the ability of the global banking system to finance the recovery."
The rules are part of efforts to prevent another shock to the financial system like that prompted by Lehman Brothers' 2008 collapse.