Global banking regulators have agreed to ease proposed new liquidity standards for banks that are being adopted as part of the new capital adequacy regime known as Basel III.

Regulators are expanding the range of assets that will count as high-quality liquid assets (HQLA) under the new standard, and phasing it in more gradually. The new liquidity coverage ratio (LCR) requirement will still be introduced on January 1, 2015, but won’t be fully phased in until Jan.1, 2019 — the minimum requirement will begin at 60%, and it will rise 10 percentage points annually.

“This graduated approach is designed to ensure that the LCR can be introduced without disruption to the orderly strengthening of banking systems or the ongoing financing of economic activity,” the regulators said.

The revisions were endorsed on the weekend by the oversight body of the Basel Committee on Banking Supervision, known as the Group of Governors and Heads of Supervision (GHOS).

In addition to the changes to the definition of HQLA, and the new timetable for the regulation, the amendments approved by the GHOS also reaffirmed that during periods of stress it would be appropriate for banks to use their stock of HQLA, thereby falling below the minimum, and that bank supervisors should provide guidance on the usability of these assets.

Additionally, the Basel Committee said it will conduct further work on the interaction between the LCR and the provision of central bank facilities. It has also pledged to continue to develop disclosure requirements for bank liquidity and funding profiles; and, to continue to explore the use of market-based indicators of liquidity to supplement the existing measures based on asset classes and credit ratings.

Mervyn King, chairman of the GHOS and governor of the Bank of England, called the agreement “a very significant achievement”, adding, “For the first time in regulatory history, we have a truly global minimum standard for bank liquidity. Importantly, introducing a phased timetable for the introduction of the LCR, and reaffirming that a bank’s stock of liquid assets are usable in times of stress, will ensure that the new liquidity standard will in no way hinder the ability of the global banking system to finance a recovery.”

With an agreement on the terms of the LCR, the Committee says it will now focus on its review of the Net Stable Funding Ratio, which “is a crucial component in the new framework, extending the scope of international agreement to the structure of banks’ debt liabilities.” This will be a priority over the next two years, it suggests.

It also pledges to continue to strengthen the peer review program established to monitor the implementation of reforms in individual jurisdictions; and monitor the impact of, and industry response to, recent and proposed regulatory reforms.

The GHOS also endorsed a new charter for the Basel Committee, which sets out its objectives and operating methods.