Liquidity regulation unveiled

The Financial Services Authority (FSA) has unveiled its overhaul of UK liquidity regulation. The overhaul has been devised to enhance the liquidity of financial services firms and act on the lessons learnt from the credit crisis, which began in 2007. The new rules include: an updated quantitative regime coupled with a narrow definition of liquid assets; enhanced systems and controls requirements; and a new regime for foreign branches that operate in the UK. "We must learn the lessons of the financial crisis and we believe that implementing tougher liquidity rules is essential to ensure that we are in a better position to face future crises," commented Paul Sharma, FSA director of prudential policy.
 
 
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