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It is not only that using payments-on-behalf-of (POBO) structures under the Single Euro Payments Area (SEPA), the companies can practically run their entire Eurozone operations through a single euro-denominated bank account. But SEPA has established a single clearing system for the 34 participating countries.

The Liquidity Coverage Ratio is defined as the ratio between available High Quality Liquid Assets and the net cash outflows. The denominator is the difference between expected cash outflows and expected cash inflows and has a minimum value of 25% of the total expected cash outflows.

Assume that, overall, the cash inflows are expected to be larger than the cash outflows for a viable financial institution and assume the institution will use a unique euro-denominated account to settle the SEPA transactions through a Pan-European Automated Clearing House as STEP2. At extreme, this means that the financial institution will have only euro-cash inflows from the clearing house (or at least close to zero euro-cash outflows), which will make the LCR mathematically ramp to very large values.

This might make the euro-denominated high quality liquid assets (usually government debt) useless from the LCR perspective.