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EBA finds most EU banks in compliance with incoming liquidity rules

The European Banking Authority said Dec. 21 that 90% of EU banks in a sample were in compliance as of the end of 2015 with new liquidity rules that take effect from 2018.

As of 2018, banks will be required to have a so-called liquidity coverage ratio of at least 100%, meaning that they have highly liquid assets equivalent to the net outflows they would expect to see in a 30-day period of high stress. As of the end of 2015, the 194 banks sampled had an average LCR of 134%, and the aggregate gross shortfall among sampled banks was €10.9 billion.

Three banks, which the EBA did not name, fell short of the current minimum LCR requirement of 70%. The EBA also noted that many of the banks that had LCRs above 100% in their reporting currency nevertheless fell below that threshold in U.S. dollars.

The EBA said it found no evidence that additional time should be granted to banks to comply with the LCR requirement.