Bank of Russia changes procedure for calculating liquidity coverage ratio

This will increase the liquidity coverage ratio (LCR) value. Consequently, banks will be able to more easily reach the LCR targets using their own resources (without Bank of Russia irrevocable credit lines) after the cancellation of the regulatory easing measures introduced in March 2024.

The LCR value will increase as the calculation will take into account high-quality liquid assets, including:

- corporate bonds with national ratings (the thresholds will be set by a decision of the Bank of Russia Board of Directors);

- high-quality liquid assets in the asset pool of clearing participation certificates; and

- deposits with the Bank of Russia with maturities of more than one day which may be withdrawn ahead of schedule.

The Bank of Russia will also modify the procedure for calculating inflows and outflows of funds associated with the development of the financial market and taking into consideration the accumulated experience of using the LCR.

Banks will be obliged to apply the updated calculation procedure from 1 October 2024 but may begin to use it earlier upon notifying the Bank of Russia.

In future, the Bank of Russia will continue to improve the liquidity risk regulation. From 1 January 2026, the regulator plans to introduce a new national LCR for SICIs.