Parent term:
56. Qualifying criteria for alternative treatment (LCR, Basel III)
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Domain: World
Definition
To qualify for the alternative treatment, a jurisdiction should be able to demonstrate that:
All of the above criteria have to be met to qualify for the alternative treatment.
- there is an insufficient supply of HQLA in its domestic currency, taking into account all relevant factors affecting the supply of, and demand for, such HQLA;(26)
- the insufficiency is caused by long-term structural constraints that cannot be resolved within the medium term;
- it has the capacity, through any mechanism or control in place, to limit or mitigate the risk that the alternative treatment cannot work as expected; and
- it is committed to observing the obligations relating to supervisory monitoring, disclosure, and periodic self-assessment and independent peer review of its eligibility for alternative treatment.
All of the above criteria have to be met to qualify for the alternative treatment.
Additional information:
(26) The assessment of insufficiency is only required to take into account the Level 2B assets if the national authority chooses to include them within HQLA. In particular, if certain Level 2B assets are not included in the stock of HQLA in a given jurisdiction, then the assessment of insufficiency in that jurisdiction does not need to include the stock of Level 2B assets that are available in that jurisdiction.