BIS: Basel III liquidity monitoring tools

While the introduction of the Liquidity Coverage Ratio and Net Stable Funding Ratio have made the measurement of liquidity across banks and jurisdictions significantly more comparable and consistent, the ratios in isolation do not capture all aspects of a bank’s liquidity risk.

In January 2013, the Basel Committee published its “Basel III: The Liquidity Coverage Ratio and liquidity risk monitoring tools” (LCR and Tools). This paper contains a number of additional metrics for use by supervisors and banks. At the same time, the Committee recognizes that supervisors may need to supplement these by using additional tools and metrics to capture jurisdiction-specific issues.

The purpose of this document is to:

  • explain the five metrics presented in the LCR and Tools document as well as show how the data can be gathered;
  • show how the data and trends in the metrics can be analyzed; and
  • outline the implications for supervision.

The paper also discusses data collection and design of liquidity reporting, to optimize the value of data for analysis and use by supervisors and banks.

Access the full report

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