Basel III and the Liquidity Standard


Many classes sell-out; we suggest registering at least two weeks in advance to ensure your seat.

Hours9:00 am – 5:00 pm; Registration/Breakfast: 8:30 am; Dress Code: Business Casual

CPE Credits: 14

Prerequisites: None
Method: Group Live

Basel III is a requirement for most banks globally. This course is designed for professionals who have familiarity with Basel III and need a particular focus on the Liquidity Standard.  The class will cover the requirements for the Liquidity Coverage Ratio and The Net Stability Funding Ratio.  The course will discuss differences in the Liquidity Coverage Ratio between the US and key member countries of the Basel Committee on Banking Supervision. The course is interactive and is comprised of a lecture and topical articles to supplement discussions of recent developments in the implementation of Basel III and the Liquidity Standard. The instructor has been consulting and training on the Basel Accord globally for over a decade.

Course Objectives

At the end of this course, participants should be able to:

  • Describe the Basel Committee on Banking Supervision’s (BCBS) Liquidity Standard

– Liquidity Ratio and Net Stable Funding Ratio

  • Differentiate between US liquidity coverage ratio rules and those of the BCBS
  • Discuss how the liquidity standard is impacting

– Bond trading
– Securitization market
– Derivatives

Module I         Overview of The Basel Committee’s Liquidity Standard

  • Describe the Liquidity Standard and its Purpose

Module II       The Liquidity Coverage Ratio

  • Define High Quality Liquid Assets
  • Differentiate between level I & II assets
  • Describe Basel requirements for different run-off rates to test net cash inflows

Module III      The US Liquidity Coverage Ratio

  • Compare and contrast differences between
    • US and Other Basel committee members
  • Enumerate challenges in calculating and reporting the LCR

Module IV      The Net Stable Funding Ratio

  • Describe the requirements of the net stable funding ratio (NSFR)
  • Discuss whether NSFR will minimize banks’ maturity mismatches

Module V       The Liquidity Standard’s Influence

  • Discuss how the Liquidity Standard is influencing
    • Bond trading
    • Global securitization markets
  • Enumerate possible unintended consequences for the Liquidity Standard
  • Debate whether the costs of the Liquidity Coverage Ratio are worth the benefits

Concluding Remarks and Recommendation of Additional Resources