The average liquidity coverage ratio (LCR) of Europe’s banks continues to improve, and was significantly above the 100% minimum requirement as of the end of 2015, according to a report published on Wednesday by the European Banking Authority.
The average LCR was 134%, the report shows, and the aggregate gross shortfall totalled €10.9 billion ($15.15 billion).
The increase in the LCR can be mainly attributed to an increase in liquid assets, which have almost doubled since June 2011, according to the report. At the same time, net cash outflows have remained relatively stable.
With the new LCR requirements due to be fully implemented by January 2018, there’s no need to recommend an extension of the phasing-in period, the EBA report says.
Separately, the EBA also announced that it plans to run its next EU-wide stress test in 2018.
“The decision to run the next EU-wide stress test in 2018 was driven by an acknowledgement of the ongoing progress that EU-banks are making in strengthening their capital positions,” the EBA says in a statement.