Delegated Act on the Liquidity Coverage Ratio

Brussels10 March 2014

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Public Hearing

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Definition of HQLA 1/2

1. Caps at 40% level 2A/15% level 2B2. Should treatment for Covered Bonds be:

a) As Level 2A assets (Basel and EBA Recs)? b) As Level 1 assets subject to RW (EBA analysis)?c) Other options:

i. For some cov. bonds, increase L2A cap/lower haircut ii.Waive 75% inflow cap for interest income.

3. Should treatment for securitisations be:a) RMBSs as Level 2B assets?b) Other securitisations as non HQLA?

4. Committed liquidity facilities at central banks • Should the delegated act include a (R) CLF and • Should conditions regarding the pricing (and the asset quality) of the CLF be

included, when such facilities fall under the exclusive prerogative of central banks?

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5. Promotional bank bonds should be:a) HQLA depending on RW of guarantor (Basel)?;b) HQLA only if explicitly guaranteed by sovereign (EBA)?;

6. Mandatory cooperative deposits at the central institution:a)Basel: no HQLA+25%/100% outflow; 0% inflow for member bankb)CRR: HQLA +100% outflow; 0% inflow for member bank

7. What should be the operational requirements for HQLA? Comments are welcome on the EBA recommendations

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Definition of HQLA 2/2

1. Established operational relationships

only Basel; Full EBA recommendations; intermediate?

(e.g. Evidence, relationship at least 24 months, non-operational all balances in excess of the average 5 day rolling cumulative net-cash outflow over the preceding 90 days)

2. Natural person deposit threshold and retail deposit outflows

1. Should LCR follow EBA guidelines / methodology / specify the higher outflows? 2. In absence of EBA GL –set absolute ceiling for retail deposits by natural persons? 3. Should interdependent outflows /inflows be considered? Under what conditions?

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Inflows / outflows

3. Potential 3% retail deposit outflows?

4. Additional objective criteria for cross-border intragroup flows?(symmetric/asymmetric?)

5. Should outflow rates for committed liquidity/credit facilities:– Apply a lower than 100% to non-financial corporates?– Distinguish credit/liquidity facilities as in Basel?;– Apply a lower than 100% to PICs and Trusts?

6. 75% Inflow cap exemption : Intra-group/Institutional Protection Schemes

specialised business models (pass-through financing models; promotional loans; auto/consumer loans, leasing and factoring, )

Covered bonds & UCITS bonds

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Inflows / outflows