Primary dealer banks will now be able to show 50 percent of HTM (held to maturity) securities, up from 25 percent, as tradable assets, according to a new decision by Bangladesh Bank.

HTM securities are debt securities purchased by banks with intent to hold them until they mature. On the other hand, HFT (held for trading) securities can be traded anytime.

Now, banks can sell up to 50 percent of HTM securities anytime.

Bankers said the move will not ease the liquidity crisis but help minimise accounting losses, not actual losses. The banks at a meeting with the BB deputy governor on May 26 suggested that up to 50 percent of HTM securities, up from 25 percent, should be shown as the statutory liquidity ratio (liquid assets).

Source: The Daily Star/Bangladesh/May 31, 2011