The Board of Governors of the Federal Reserve System (the “Board”), the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) (collectively, the “agencies”) issued the finalized Liquidity Coverage Ratio (LCR) rule yesterday. In October 2013, the agencies issued a notice of proposed rulemaking that provided that covered organizations would need to maintain an amount of high-quality liquid assets (HQLA) equal to those organizations’ estimated net cash outflows over a 30-day stressed liquidity period (HQLA, the numerator of the LCR equation, divided by net cash outflows, the denominator, would need to equal 100%). The proposal also provided that HQLA would be divided into three categories, the lower two of which would be assigned haircuts.

The final rule is more liberal than the proposal in a number of ways.