Revision of Liquidity Ordinance for banks
Bern, 25.06.2014 - During its meeting today, the Federal Council resolved to revise the Liquidity Ordinance (LiqO). It will enter into force on 1 January 2015.
Effective since 2012, the LiqO requires banks to manage and monitor liquidity risks appropriately. It was thus possible to transpose part of the international liquidity standards of the Basel Committee on Banking Supervision (Basel Committee) into Swiss law.
In a second step, the quantitative liquidity requirements will now be adopted as well in accordance with the international liquidity standards. These standards were not defined by the Basel Committee until January 2013.
Specifically, a Liquidity Coverage Ratio (LCR) will be introduced for short-term liquidity, requiring banks to have sufficient high-quality liquid assets. A bank should thus be able to survive for at least 30 days in the event of a liquidity stress scenario with client deposits being withdrawn or difficulties with securing refinancing on the capital market.
The amendments will enter into force on 1 January 2015.
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