The Liquidity Coverage Ratio (LCR) in Basel III

Multiple Choice

The Liquidity Coverage Ratio (LCR) in Basel III:

A) is a new rule that compares liquid asset levels in banks to their available equity capital
B) spells out a modernized system for calculating the required minimum reserve that banks must hold at the central bank
C) compares liquid and reliably liquidating assets to expected cash outflows from specified run-off rates for various liability classes under a short-term stress scenario
D) tied directly into the internal ratings-based approach for determining the liquidity of credit-counterparties