Bank Liquidity Requirements: Federal Reserve Finalizes Public Disclosure Requirements for the Liquidity Coverage Ratio

Sullivan & Cromwell LLP - December 22, 2016

On December 19, the Federal Reserve published a final rule implementing public disclosure requirements for bank holding companies subject to the liquidity coverage ratio (the “LCR”) that will require them to publicly disclose quantitative and qualitative information regarding their respective LCR calculations on a quarterly basis.  The final rule adopts the quantitative components of the LCR disclosure as proposed, but includes certain changes from and clarifications to the proposed rule with respect to the required qualitative disclosures that were suggested by industry commenters, including.

  • clarifying that a covered company may, in determining which items are “significant” to its LCR for purposes of providing qualitative discussion, assess such items based on their materiality;
  • eliminating the requirement to provide a discussion of any “significant changes” occurring during the time between the end of the most recent quarter and the disclosure for that period; and
  • clarifying that a covered company will not be required to include any information that is proprietary or confidential in its qualitative disclosures.
The final rule also extends the implementation timeline by nine months such that a covered company will be required to make the required public disclosures approximately five calendar quarters following the requirement to submit liquidity information to the Federal Reserve via the FR 2052a report.