International industry lobbying for a watering down of the liquidity targets proposed for banks may be successful, with both rumoured and confirmed evidence of a change of heart on the part of regulators.Over the weekend, the Wall Street Journal reported that regulators may allow banks to count gold and some equity holdings as liquid assets on top of cash and government bonds.In some jurisdictions (and, in theory, in almost all) a new liquidity coverage ratio will come into force in coming years. In Australia, it will apply from the beginning of 2015.A bank will be required to maintain sufficient "unencumbered, high-quality liquid assets" to meet its liquidity needs for a 30-day period, under what the Australian Prudential Regulation Authority terms "a significantly severe liquidity stress scenario".Global banks (both those in North America and most especially those most affected by the strained state of funding markets in Europe) have lobbied to soften the impact of the planned liquidity rules and other aspects of the pact to overhaul and harmonise banking regulations known as Basel III.Some officials are voicing support.Mervyn King, governor of the Bank of England, said at the end of last week that "much work still needs to be done to ensure that those [Basel III] rules are properly integrated with the regime of liquidity provision by central banks.  "In current exceptional conditions, where central banks stand ready to provide extraordinary amounts of liquidity against a wide range of collateral, the need for banks to hold large liquid asset buffers is much diminished, and I hope regulators around the world will take note."King made the remarks in a speech in which he also announced that the Bank of England would activate, from this week, a six-month funding instrument labelled the "Extended Collateral Term Repo Facility".He said the rationale for doing so was the "actual or prospective market-wide stress of an exceptional nature" over the coming weeks, stresses linked to the second general election in Greece, the bail-out of Spain's banking system, and the repeated blows to business and consumer confidence from the 2012 version of the five-year old global financial crisis.King also said the BoE was working on a term-funding facility that it will make available to banks at "below market" rates. Banks will, however, have to enter into a compact with the UK Treasury to meet lending targets.The BoE governor also provided a sober summary of (British and European) markets."Perhaps the sequel [to the ongoing crisis] will be the provision by the ECB (European Central Bank) of liquidity as the bridge to the other side of the crisis.  "No central bank has done more in recent months to flood the system with liquidity than the ECB - one trillion euros injected through two long-term refinancing operations.  "Those two operations demonstrated that liquidity is not the issue, because after a few months we are back to where we were.  "The problem is one of solvency."