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Friday, April 25, 2014

Colombia to raise liquidity requirements for brokerages

(Reuters) - Colombia's financial regulator said on Wednesday it will increase the proportion of liquid assets brokerages must hold starting in November, in a bid to reduce exposure to risk.

The regulator said it will alter, and impose limits on, the way it measures liquidity risk.

The new rules will require brokerages to hold a big enough share of liquid assets in their portfolios to offset risk from cash investments, term deposits and investments in derivatives.

It is the latest in a series of regulatory adjustments in Latin America's fourth-biggest economy that have been put in place since the collapse of the Interbolsa brokerage at the end of 2012 due to liquidity problems rooted in mismanagement and excessive risk taking.

reuters.com

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