Liquidity Coverage Ratio (LCR)
The Liquidity Coverage Ratio (LCR) is a bank regulatory standard whose aim is to underpin the resilience in the short term of a bank’s liquidity risk profile. Under the LCR, banks are required to maintain a stock of unencumbered high quality liquid assets (HQLA) that can be converted into cash at little or no loss of value in private markets to meet their liquidity needs for 30 days under a stressed scenario. The LCR (HQLA divided by modelled net outflows over 30 days) must equal 100% or more at all times. See Level 1 and Level 2 Assets (LCR).