FRM Glossary · Part II · Liquidity

Liquidity Coverage Ratio (LCR)

High-quality liquid assets divided by stressed net cash outflows over 30 days — must exceed 100%.

In more detail

LCR = HQLA / (Stressed outflows − Stressed inflows) over 30 days, ≥ 100%. HQLA is graded Level 1 (cash, government bonds) and Level 2 (certain government / agency securities) with haircuts. The NSFR complements the LCR with a 1-year horizon requirement for stable funding.