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File #: 160287    Version: 0 Name:
Type: Resolution Status: ADOPTED
File created: 4/7/2016 In control: CITY COUNCIL
On agenda: Final action: 4/28/2016
Title: Calling upon the United States Senate to approve H.R. 2209, recently approved on February 1, 2016 by the House of Representatives, to require the appropriate Federal banking agencies to treat certain municipal obligations as level 2A liquid assets by amending the rule entitled "Liquidity Coverage Ratio: Liquidity Risk Measurement Standards; Final Rule"
Sponsors: Councilmember Parker, Councilmember Gym
Attachments: 1. Resolution No. 16028700.pdf, 2. Signature16028700.pdf
Title
Calling upon the United States Senate to approve H.R. 2209, recently approved on February 1, 2016 by the House of Representatives, to require the appropriate Federal banking agencies to treat certain municipal obligations as level 2A liquid assets by amending the rule entitled "Liquidity Coverage Ratio: Liquidity Risk Measurement Standards; Final Rule"

Body
WHEREAS, The third installment of the Basel Accords was developed in response to the deficiencies in financial regulation revealed by the financial crisis of 2007-08. Basel III is intended to strengthen bank capital requirements by increasing bank liquidity and decreasing bank leverage; and

WHEREAS, The Liquidity Coverage Ratio ("LCR") was introduced by the Basel Committee on Banking Supervision to require large banks and bank holding companies to hold a sufficient quantity of liquid assets to enable them to survive a bank "run" lasting roughly 30 days. Each covered bank and bank holding company must estimate the volume of short-term liabilities that might "run" in a 30-day crisis period and each covered institution must hold enough high quality liquid assets (HQLA) so that the bank or bank holding company could sell these assets and use the proceeds to replace the funding shortfall caused by the "run"; and

WHEREAS, The Federal Reserve, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation (Federal banking agencies) have promulgated regulations to implement the Basel III LCR rule. Under these interagency rules, HQLA is divided into three categories (Level 1, Level 2A, and Level 2B). The regulations provide that across the categories, the combination of Level 2A and 2B assets cannot exceed 40% of a covered financial institution's HQLA with 2B assets limited to a maximum of 15% of the institution's HQLA; and

WHEREAS, On September 3, 2014, Federal banking agencies issued a final rule that implements the LCR consistent with the Basel Committ...

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