Video: Banks can arbitrage central bank liquidity provision

There is a conflict between new liquidity ratios under Basel III and existing central bank operations, which could create arbitrage opportunities for banks and ultimately undermine the risk position of central banks, warned Jeroen Lamoot, a financial stability and policy expert at the National Bank of Belgium.

Speaking at Central Banking Journal's sister title Risk's Basel III conference in London in late September, Lamoot explained that new liquidity ratios under Basel III are primarily designe