The Federal banking agencies on September 3 announced the adoption of a final rule that implements a quantitative liquidity requirement consistent with the liquidity coverage ratio (“LCR”) under the Basel III standards. The LCR will apply to all banking organizations with $250 billion or more in total consolidated assets or $10 billion or more in on-balance sheet foreign exposure. U.S. banking organizations subject to the LCR will be required to comply by January 1, 2017.

     Nutter Notes: The federal banking agencies also announced on September 3 that they have adopted a final rule that modifies the methodology for including off-balance sheet items, including credit derivatives, repo-style transactions and lines of credit, in the denominator of the supplementary leverage ratio to conform to Basel III capital standards. The supplementary leverage ratio rule applies only to banking organizations that are subject to the agencies’ advanced approaches risk-based capital rules. The revised supplementary leverage ratio capital requirements become effective on January 1, 2018.