The LCR ensures a bank can survive a 30-day stress scenario using its own liquid assets. It was phased in after the 2008 crisis and has applied in full since 2019.
How to use the LCR Calculator: Liquidity Coverage Ratio
- Level 1 assets (cash, central bank reserves, government bonds)
- Level 2A assets (before 15% haircut)
- Level 2B assets (before 50% haircut)
- Total cash outflows (30 days)
- Total cash inflows (30 days)
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter Level 1, Level 2A and Level 2B assets, and the expected cash outflows and inflows over 30 days.
Inputs explained
| Field | What to enter |
|---|---|
| Level 1 assets (cash, central bank reserves, government bonds) | Amount in your currency |
| Level 2A assets (before 15% haircut) | Amount in your currency |
| Level 2B assets (before 50% haircut) | Amount in your currency |
| Total cash outflows (30 days) | Amount in your currency |
| Total cash inflows (30 days) | Amount in your currency |
What each result means
- High-quality liquid assets (after haircuts) = [Level 1 assets (cash, central bank reserves, government bonds)] + 0.85×[Level 2A assets (before 15% haircut)] + 0.5×[Level 2B assets (before 50% haircut)]
- Net cash outflows = [Total cash outflows (30 days)] – min([Total cash inflows (30 days)], 0.75×[Total cash outflows (30 days)])
- Liquidity coverage ratio = [High-quality liquid assets (after haircuts)]÷[Net cash outflows]×100
Example values
How the main result changes when Level 1 assets changes and everything else stays at the example values above:
| Level 1 assets (cash, central bank reserves, government bonds) | Liquidity coverage ratio (%) |
|---|---|
| 250 | 79.5 |
| 375 | 104.5 |
| 500 | 129.5 |
| 625 | 154.5 |
| 750 | 179.5 |
| 1,000 | 229.5 |
Formula
HQLA = Level 1 + 85% × Level 2A + 50% × Level 2B (Level 2 ≤ 40%, 2B ≤ 15% of HQLA)
Net outflows = outflows − min(inflows, 75% × outflows)
LCR = HQLA ÷ net cash outflows × 100 (≥ 100%)
Worked example
Inputs: Level 1 assets (cash, central bank reserves, government bonds): $500; Level 2A assets (before 15% haircut): $150; Level 2B assets (before 50% haircut): $40; Total cash outflows (30 days): $700; Total cash inflows (30 days): $200.
Results: High-quality liquid assets (after haircuts) = $647.50; Net cash outflows = $500.00; Liquidity coverage ratio = 129.5 %; Basel III minimum = Meets the 100% minimum.
Frequently asked questions
What is the liquidity coverage ratio?
HQLA ÷ net cash outflows over 30 days.
What is the minimum LCR?
100% under Basel III.
What are HQLA?
Assets easily converted to cash, like reserves and government bonds.