The rules, approved by the U.S. Federal Reserve and the Office of the Comptroller of the Currency, are a new building block in a global effort to make big banks such as JPMorgan Chase (>> JPMorgan Chase & Co.) and Citigroup (>> Citigroup Inc) sturdier and head off a future meltdown.

"Liquidity squeezes were the agents of contagion in the financial crisis," Federal Reserve Governor Daniel Tarullo said. "The (new rule) makes such squeezes less likely by limiting large banks from taking on excessive liquidity risk."

The Federal Reserve said big U.S. banks would need to hold a total of about $2.5 trillion in highly liquid assets by 2017, and that they would have a shortfall of about $100 billion if that threshold applied today.

The regulators also proposed rules determining how much money - or margin - swaps buyers and sellers must set aside when they do trades outside central clearing houses, which makes them more risky than cleared derivatives trades.

The liquidity rules, which were first proposed in October 2013, will force banks to hold enough liquid assets such as cash, treasury bonds and other securities to fund themselves over a 30-day period during a crisis.

In the wake of the last crisis, regulators have told banks to rely less on borrowed money, and to raise more shareholder equity, but they had yet to address problems with everday cash needs that came to light during the crisis.

The final rule provided some relief from the proposed version, allowing smaller banks to make their liquidity calculations on a monthly basis rather than every day. It also exempted "systemic" financial companies regulated by the Fed that aren't banks - such as insurer Prudential Financial Inc (>> Prudential Financial Inc).

Banks with more than $250 billion in assets will still have to tabulate their daily liquidity needs.

The Fed's estimate of the current shortfall is half of the $200 billion shortfall the regulator estimated in its proposed rule. Bank of New York Mellon (>> The Bank of New York Mellon Corporation), PNC Financial Services (>> PNC Financial Services Group Inc) and U.S. Bancorp (>> U.S. Bancorp) are examples of banks that currently do not meet the ratio, according to a note by KBW research analysts.

Fed staff said they want to work on a plan to eventually include the most liquid municipal bonds in the asset buffer, although for now they will not count, something that has frustrated local government officials.

The officials have argued banks will buy fewer of their bonds and taxpayers will shoulder more costs for projects such as new roads.

MORE RULES

Tarullo, the Fed's top official on financial regulation, said more rules were forthcoming. He said the Fed would write separate liquidity rules for foreign banks that are exempted from the rule that was finalized on Wednesday.

Liquidity standards for the handful of non-banks overseen by the Fed would be issued by order, he said.

Separately, the Fed is working on rules to rein in banks that heavily rely on short-term funding tools, and it will also need to implement forthcoming global requirements that would force banks to calculate their liquidity needs over a full year, the so-called net stable funding ratio.

The Fed also reproposed margin requirements for swap trades conducted outside clearing houses, which function as middlemen by taking on the risk that trading partners cannot deliver on their promises to make them less risky.

Swaps, a form of derivatives, mushroomed during the pre-crisis boom when they were only lightly regulated. Now, they must be routed through clearing houses, but some are so complex that they still won't be cleared, and the new rules set out how much money trading partners need to set aside.

Trading counterparties must post enough buffers to give themselves 10 days to unwind any deal going awry, the rules say. For cleared swaps, that period is one to five days.

That makes cleared swaps far cheaper to use, and market parties have said that the margin rules could have a direct impact on how popular these swaps are with clients.

The reproposal largely followed a global agreement released in 2013, and superseded an initial Fed proposal from 2011. The new U.S. proposal was somewhat stricter in its definition of large financial end users, agency staff said.

The Federal Deposit Insurance Corporation is set to vote on the rules later on Wednesday.

(Reporting by Emily Stephenson and Douwe Miedema; Editing by Karey Van Hall, Bill Trott and Paul Simao)

By Emily Stephenson and Douwe Miedema