Question 8.

Topic: Liquidity Coverage Ratio (LCR)

Which of the following statements are valid?

a.Banks can meet LCR requirements by holding HQLAs in excess of 100% of the projected cash outflows of over the next 30-days period in a stress scenario approved by the Fed.

b.At least 60% of the HQLAs must be composed of Level 1 assets.

c.Non-HQLA assets can be held to satisfy LCR up to 5% of LCR.

d.LCR requirements allow banks to internally meet liquidity needs before going to the Fed. This gives Fed more time to assess liquidity stress in the markets