4 Liquidity Coverage Ratio Calculation

LCR is the first standard that assesses the short-term liquidity challenges of a bank. The two standards - LCR and NSFR, complement each other, are aimed at providing a holistic picture of a bank’s funding risk profile, and aid in better liquidity risk management practices. The LCR as prescribed by the HKMA is required to be reported by all institutions designated as Category 1 by the Hong Kong Monetary Authority.