The Riksbank supports the proposal for LCR requirements in individual currencies
News, Consultation responses The Riksbank has long considered that the Swedish banks should face Liquidity Coverage Ratio (LCR) requirements in both Swedish krona and other significant currencies. It is therefore good that Finansinspektionen is proposing LCR requirements for Swedish banks in individual significant currencies. However, the Riksbank thinks that the ratio should correspond to the international standard of 100 per cent for all significant currencies. The Riksbank also supports the proposal regarding diversification of the composition of the liquidity buffer.
In its consultation response, the Riksbank supports Finansinspektionen’s proposal regarding LCR requirements. This is an important step in strengthening the banks’ resilience to liquidity risks. However, the Riksbank sees no clear justification for the liquidity coverage ratios in significant currencies other than US dollars and euros to be set at 75 per cent. The Riksbank thinks that they should correspond to the international standard of 100 per cent for all significant currencies unless there is some special reason to set a different level. The Riksbank also sees a need for increased clarity and transparency with regard to the banks’ liquidity risks.
The Riksbank supports the proposal for a concentration limit regarding covered bonds, but is of the opinion that this should apply per currency.