On 12 July 2019, the European Banking Authority (EBA) published its first report on the monitoring of liquidity coverage ratio (LCR) implementation in the EU. The EBA’s monitoring of the LCR contributes to a consistent application of EU law and promotes common supervisory approaches and practices in this area.
In the report, the EBA has highlighted areas in which further guidance is deemed useful for banks and supervisors in order to foster a common understanding and harmonisation of the application of the liquidity standard, while at the same time reducing some issues on the level playing field. In particular, the report provides guidance on operational deposits and retail deposits excluded from outflows as well as on notifications on additional liquidity outflows. In addition, the report has identified areas that may need further attention from supervisors in their ongoing supervision of liquidity risks.