Basel Regulators Seek to Close Loopholes in Bank-Liquidity Rules

Global regulators are targeting possible loopholes in draft rules to bolster banks’ liquidity as they push for agreement on parts of the standard by March, a member of the Basel Committee on Banking Supervision said.

Discussions are under way about what assets lenders should be allowed to count toward their minimum liquidity reserves and on how to prevent banks from using “regulatory arbitrage” to get around aspects of the measure, Sabine Lautenschlaeger, vice president of Germany’s central bank, said in a telephone interview this week.