I'd like to welcome our guests to the Federal Reserve Board as we discuss a proposal that represents a key component of our effort to promote financial stability. The proposal, which today the Board will consider publishing for public comment, would implement the Basel III liquidity coverage ratio that the Federal Reserve and regulators from around the globe crafted for large and internationally active banking organizations and financial companies. It would also establish an enhanced prudential liquidity standard consistent with section 165 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Liquidity is essential to a bank's viability and central to the smooth functioning of the financial system. The proposed rule would, for the first time in the United States, put in place a quantitative liquidity requirement that would foster a more resilient and safer financial system in conjunction with other reforms.
I look forward to today's discussion of this important initiative.