A minimum level of liquid assets should be held at banks to ensure their ability to sustain a short term liquidity stress (both bank specific and market wide).

Banks should also structure their funding profile to limit the impact of long term market disruptions and avoid cliff effects (A large amount of liabilities maturing at the same time).

To achieve these two objectives, the Central Bank requires banks to comply with the following ratios, at all times;

1. The Eligible Liquid Assets Ratio (ELAR); or
    
2. The Liquidity Coverage Ratio (LCR) - following approval from the Central Bank.
    

   The transition to the LCR ratio will take effect from 1 January 2016. Banks must demonstrate that both the qualitative and quantitative measures have been adequately addressed before adoption of the LCR ratio.

   All banks approved to move to the LCR are expected to implement the LCR by the final Basel III implementation date of 1 January 2019.

3. Banks approved to move onto the LCR will also be required to comply with the Net Stable Funding Ratio (NSFR) when this ratio comes into effect by 1 January 2018.

The Central Bank will set up a liquidity task force to ensure a smooth implementation of the LCR and NSFR. The team will visit banks and request a "road map" with clear milestones explaining how the bank will meet the LCR and the NSFR by their respective due dates. The team will then assess the plan and provide guidance. The team will also monitor the progress of the bank against its internally set milestones.