The U.S. Federal Reserve on Thursday unveiled a plan requiring banks to hold enough assets they can easily sell to survive a credit crunch, which it said was tougher than what international regulators demanded.
The plan, which will tell banks to hold enough liquid assets to meet their cash needs for 30 days, is a key plank of the Basel III capital rules agreed globally to make banks safer after the 2007-09 credit crisis.
But Fed Governor Dan Tarullo said that the U.S. plan had a tougher transition timeline, and stricter definition of what counted as the high-quality liquid assets the central bank will require the lenders to stock up on.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.