On the surface, one might be lulled into viewing statements issued over the last two days by the Group of Governors and Heads of Supervision (GHOS), the oversight body of the Basel Committee on Banking Supervision, as a steadfast affirmation of its mission to make the world's banks safer and more resilient.

In fact, despite language that might lead you to believe otherwise, a unanimous vote by those overseers on revisions to the Basel Committee's Liquidity Coverage Ratio (LCR) offers a victory for banks and relief from what they have fought as onerous requirements. Among the concessions earned: four additional years to phase in new capital rules and a decision that “safe” and liquid bank capital can include (albeit with holding limits and after a “haircut” to their value) stocks and residential mortgage-backed securities.

These were among the items included in the revised LCR, described as “an essential component” of Basel III's internatonal regulatory standards on bank capital adequacy and liquidity. The LCR was first published in December 2010 and is periodically reviewed for “its implications for financial markets, credit extension and economic growth” and “addressing unintended consequences as necessary.”

This week, GHOS agreed that the LCR should be subject to longer phase-in arrangements. It will be introduced as planned on Jan. 1, 2015, but the minimum requirement will now begin at 60 percent, rising in equal annual steps of 10 percentage points to reach 100 percent by Jan. 1, 2019.

“This graduated approach is designed to ensure that the LCR can be introduced without disruption to the orderly strengthening of banking systems or the ongoing financing of economic activity,” the group said in a statement.

It also agreed that while riding out its 30-day stress test scenario it would be “entirely appropriate” for banks to use their high-quality liquid assets,” to meet liquidity needs. Among the assets now allowed in the revised LCR are: sovereign debt; residential mortgage backed securities (subject to a 25 percent) with a long-term credit rating of AA or higher; stocks that are exchange traded and centrally cleared, and a constituent of the major stock index in the home jurisdiction or where the liquidity risk is taken; and corporate bonds rated BBB-minus to A-plus (dropped from the 2010 eligibility baseline of corporate debt that banks can use, allowing securities with a credit rating of AA-).

The nature of that 30-day crisis assessment also changed, with the revised LCR reducing projections of lost retail deposits from 5 percent to 3 percent and dropping corporate credit draw downs from 100 percent to 30 percent.

Notwithstanding the pullback from more burdensome bank requirements, a statement issued by GHOS reiterates that the LCR is “one of the Basel Committee's key reforms to strengthen global capital and liquidity regulations.”

"The Liquidity Coverage Ratio is a key component of the Basel III framework,” said Mervyn King, GHOS chairman and Governor of the Bank of England. “The agreement reached today is a very significant achievement. For the first time in regulatory history, we have a truly global minimum standard for bank liquidity. Importantly, introducing a phased timetable for the introduction of the LCR, and reaffirming that a bank's stock of liquid assets are usable in times of stress, will ensure that the new liquidity standard will in no way hinder the ability of the global banking system to finance a recovery."