Following requests from many banks and municipal-finance officers, the FRB—but not the OCC or FDIC—is proposing that general obligation securities (GOs) of a public-sector entity that meet tough criteria be eligible as Level 2B assets for purposes of the liquidity coverage ratio. However, these eligibility conditions are so stringent as to limit this flexibility not only to FRB-regulated companies, but also to a very limited class of GOs under such strict conditions as to make the authority in practice very difficult to utilize.
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