Here are the key differences between the Liquidity Coverage Ratio (LCR) and APS 210 requirements:
- Scope: LCR applies to internationally active banks on a consolidated basis, while APS 210 applies to authorized deposit-taking institutions (ADIs) in Australia on both a Level 1 and Level 2 basis.
- Time horizon: LCR looks at banks' ability to survive a 30-day stress scenario, while APS 210 assesses liquidity over a 3-month period.
- High-quality liquid assets (HQLA): LCR has stricter criteria for what qualifies as HQLA compared to APS 210. LCR haircuts assets to reflect quality/liquidity.