43. Mitigation period for the asset replacement (LCR, Basel III)

Definition

In order to mitigate cliff effects that could arise, if an eligible liquid asset became ineligible (eg due to rating downgrade), a bank is permitted to keep such assets in its stock of liquid assets for an additional 30 calendar days. This would allow the bank additional time to adjust its stock as needed or replace the asset.

Related terms:

Parent term:

(2) Operational requirements (LCR, Basel III)

Sibling terms:

28. Purpose of the operational requirements (LCR, Basel III)
29. Manifestation of the liquidity (LCR, Basel III)
30. Regular asset monetisation (LCR, Basel III)
31. Unencumbered characteristics of the assets (LCR, Basel III)
32. Influence of operational capability to monetise (LCR, Basel III)
33. Demonstrability of the stock control (LCR, Basel III)
34. Hedge impact (LCR, Basel III)
35. HQLA management (LCR, Basel III)
36. Consolidation of the assets (LCR, Basel III)
37. Impediments to the asset transfer (LCR, Basel III)
38. Asset classes traded in the market of limited size (LCR, Basel III)
39. Rehypothecated assets (LCR, Basel III)
40. Derivatives transaction collateral (LCR, Basel III)
41. Intraday liquidity management (LCR, Basel III)
42. Currency localisation and currency exchange risks (LCR, Basel III)