At the same time, Basel III requires banks to issue much larger quantities of long-term debt to meet new liquidity ratios.

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Give him an inch, and he will indeed take an hour to discuss the crucial but unglamorous restructuring of global financial institutions and liquidity ratios, or so it can seem.

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In regards to leverage, Basel III introduced a minimum 3% leverage ratio and two required liquidity ratios: (1) the Liquidity Coverage Ratio, which requires a bank to hold high-quality liquid assets to cover its total net cash outflows over 30 days, and (2) the Net Stable Funding Ratio, which requires the available amount of stable funding to exceed the required amount of stable funding over a one-year period of extended stress.

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Among exchange traded funds holding a broad index of small companies, two stand out for low expense ratios and good liquidity: the Schwab U.S. Small Cap ETF ( SCHA ) and the Vanguard Small Cap ETF ( VB ).

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Under the Basel III rules, banks have to restructure their balance sheets to meet new liquidity and risk-weighted asset ratios, and small-business loans can often fall under the riskier categories.

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Liquidity is fair, based on current account ratios.

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He wanted to invest in financially sound firms, so the model I base on his writings looks for companies with current ratios of 2.0 or higher, a sign of strong liquidity.

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