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Liquidity and treasury

High Quality Liquid Assets (HQLA)

Assets a bank can turn into cash quickly and without material loss, held to meet the Liquidity Coverage Ratio.

High Quality Liquid Assets are the buffer a bank holds so it can raise cash fast in a stress. They are split into levels, with cash, central bank reserves and top rated government bonds as the highest quality, and certain corporate and covered bonds allowed at a haircut in lower levels.

The size and quality of the buffer feeds straight into the Liquidity Coverage Ratio, so treasury balances the cost of holding low yielding liquid assets against the regulatory need for them.

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