Banks will pay a fee of 15 basis points for the Reserve Bank of Australia's liquidity facility once the new rules on liquidity come into force from 2015. The RBA announced the fee yesterday in conjunction with the release of a discussion paper by APRA on its approach to liquidity management.The Australian Prudential Regulation Authority and the RBA first announced their plan to introduce a committed liquidity facility late in 2010. They provided some details on the scope of the facility in February, but the pricing was not known until now.Banks' use of the facility is linked to the introduction from 2015 of the new Basel III liquidity coverage ratio.The LCR - which has been foreshadowed for more than a year - will require banks to maintain sufficient "unencumbered, high-quality liquid assets" to meet its liquidity needs for a 30-day period under what APRA terms "a significantly severe liquidity stress scenario".In addition, banks will need to maintain a stock of qualifying liquid assets to forecast cash out-flows over the next 30 days.APRA said yesterday that "the LCR must be no less than 100 per cent [of these forecast requirements] and APRA would expect ADIs to maintain an adequate buffer above the minimum requirement."The regulator is also looking to banks to conform to the requirements of the new rules earlier than 2015 as far as practical.The facility is needed to meet the narrow definition of liquid securities imposed by the Basel III rules. The definition treats only government securities and a few other securities as being sufficiently liquid to satisfy the ratio requirements.In Australia, government bonds will be scarce given the stance of fiscal policy, with little net new debt likely to be required from 2013 if the budget moves into balance over the next two years as planned.Under proposals released yesterday, APRA said an ADI must first seek approval from the regulator to meet part of its liquidity requirements through the committed liquidity facility, and, in practice, most banks will need to do so.The RBA said yesterday that APRA may ask ADIs to confirm as much as 12 months in advance the extent to which they will be relying on a commitment from the RBA to meet their LCR requirement.APRA also said that banks will have to forecast their funding requirements 15 months ahead. The extension to 15 months, from 12 months, for this forecasting is one of the few deviations in yesterday's discussion paper from the version released in February.The regulator stuck to its austere view of the securities that would qualify as "Level 1 assets" for the purposes of the liquidity coverage ratio. These remain cash, balances held with the RBA, and Commonwealth government and semi-government securities. Supra-national bonds were once again excluded.APRA also confirmed that no assets at all would qualify as "Level 2 assets", a broader category which can include some corporate bonds, though the regulator did note there was potential for a rethink if only a corporate bond market would develop and some Australian companies