Ali said introduction of LCR by the Islamic Financial Services Board (IFSB) is expected to address the issues such as the lack of high quality assets provided the regulators come up with a relatively comprehensive list of high quality liquid asset
(HQLA) keeping in mind the Islamic banks' Shariah-imposed investment restrictions.
The Australian Prudential Regulation Authority published a discussion paper on Basel II liquidity reforms, where it stopped short of recommending an increase in high quality liquid asset
The instrument has been designed to ensure that it is recognisable as high quality liquid assets
and as a securitisation under CRD (capital requirements directive) definitions; this has resulted in high levels of demand from conventional institutions as well as from Islamic investors, he added.
The latter is calculated as a ratio of high quality liquid assets
to net cash outflows over a thirty day period.
Maintaining a prudent and conservative approach to risk management, efficient management of liquidity and pricing, particularly on high quality liquid assets
, have contributed to improvement in performance," said Eisa Saleh Al Gurg, Deputy Chairman of NBF.
1 per cent and increasing liquidity buffers due to its stock of high quality liquid assets
increasing by 32.
Since 1 January 2015, ADIs subject to the LCR requirement are required to hold a stock of high quality liquid assets
(HQLA) sufficient to survive a severe liquidity stress scenario lasting 30 days.
the benefit from rising sovereign issuance is that it will have a chance of reaching such a volume that meets both banks' (particularly Islamic banks which are highly liquid) need for high quality liquid assets
and Takaful operators need for domestic, Shari'ah- compliant fixed income.
Unfortunately, on April 1, 2016, the Federal Reserve Board announced that it would adopt a final rule that would classify a very limited number of investment-grade, liquid, and readily marketable municipal securities as high quality liquid assets
(HQLA)--an attempt to correct the 2014 Liquidity Coverage Ratio (LCR) Rule, which excludes investment-grade municipal securities in any of the acceptable investment categories for banks to meet liquidity standards.
The implementation of central clearing arrangements, UCITS V and Basel III requirements, and an increasing need for many market participants to source high quality liquid assets
(HQLA), are the top priorities for buy-side companies.
Universal and commercial banks will be required to hold sufficient high quality liquid assets
(HQLAs) that can be easily converted into cash to service liquidity requirements over a 30-day stress period.
Sukuk have the potential to serve as high quality liquid assets
, which is of increasing importance to regulators in the implementation of Basel III liquidity and capital adequacy frameworks, he said, noting but developing the Sukuk market requires further improvements to legal, regulatory, and disclosure norms, and stronger market infrastructure-including developing the secondary market.