As part of its regulatory rewrite, the Basel Committee has proposed stringent new liquidity-risk measures that would go well beyond current risk-management policy to identify specific liquidity ratios and hold banks accountable for meeting them.  The new measures address both short-term liquidity (i.e., that for no more than thirty days) and longer-term (one-year) funding flows.  They will significantly increase the funding requirements associated with a wide array of on- and off-balance sheet commitments, sharply increasing the need for banks to hold cash, core deposits and other stable funding obligations and possibly driving up the cost for these instruments as overall market demand for them grows.  The need to fund off-balance sheet commitments (often now unfunded obligations), to discount certain funding sources on which banks to date have relied and the proposed requirement to better match maturities will also have significant impact on funding cost and, as a result, credit and investment activity.   

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