Liquidity Coverage Ratio (LCR) Explained | FRM Part 2 | Liquidity Risk | CFA Level 2

In this video, we take a look at the Liquidity Coverage Ratio (LCR), a liquidity focused ratio introduced as part of the Basel III reforms. The Liquidity Coverage Ratio measures the bank's probable reaction to a liquidity crisis lasting 30 days, ensuring that it has sufficient high-quality liquid assets to deal with the crisis. The ratio ensures that cash outflows that could possibly occur in the 30 day period are fully covered by ready cash sources.
This video will be helpful for candidates preparing for the FRM Part 2 exam and also for candidates appearing for the CFA Level 2 exam. This topic appears in Book 4 (Liquidity Risk) of FRM Part 2 curriculum. For preparation resources for FRM Part 2 exam, please head over to the course page via the link below:
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