high-quality liquid assets (HQLA)

High-Quality Liquid Assets (HQLA) are assets that banks can quickly and easily convert into cash with minimal loss of value during financial stress. They serve as a safety buffer to ensure banks can meet their short-term obligations, like customer withdrawals or urgent funding needs. HQLAs typically include cash, central bank reserves, and highly rated government or premier debt securities. Regulators require banks to hold sufficient HQLA to promote stability and prevent bank failures during economic downturns or liquidity crises.