Aus­tralia cbank plans bank fa­cil­ity for Basel

The Pak Banker - - Company& -

SYD­NEY: Aus­tralia's cen­tral bank on Fri­day said it would es­tab­lish a liq­uid­ity fa­cil­ity to al­low lo­cal banks to meet new Basel rules on high­qual­ity liq­uid­ity re­quire­ments.

The Re­serve Bank of Aus­tralia (RBA) said an au­tho­rised de­posit-tak­ing in­sti­tu­tion (ADI) would be able to es­tab­lish a com­mit­ted se­cured liq­uid­ity fa­cil­ity with the RBA, suf­fi­cient in size to cover any short­fall be­tween the ADI's hold­ings of high-qual­ity liq­uid as­sets and the liq­uid­ity cov­er­age ra­tio set by Basel.

Qual­i­fy­ing col­lat­eral for the fa­cil­ity would com­prise all as­sets el­i­gi­ble for re­pur­chase trans­ac­tions with the RBA un­der nor­mal mar­ket op­er­a­tions. In re­turn for the com­mit­ted fa­cil­ity, the RBA would charge a mar­ket-based com­mit­ment fee.

Aus­tralian banks would have had trou­ble meet­ing the new Basel stan­dards since there was not enough high-qual­ity liq­uid as­sets, such as govern­ment bonds, in the coun­try for them to hold. - PB News

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