While there are no obvious risks to global financial stability as of yet, there are a number of vulnerabilities that are a cause for concern, such as high levels of debt in certain parts of the economy, said Agustín Carstens, general manager at the Bank for International Settlements (BIS).
Capital
No need to change TLAC, but FSB monitoring implementation
There currently is no need to modify the total loss absorbing capacity (TLAC) rule, but further efforts are needed to implement the standard effectively, the Financial Stability Board (FSB) said in a statement.
Basel Committee asks for disclosures around leverage ratio window dressing
To address concerns over quarterly bank window dressing activities to flatter their leverage ratio numbers, the Basel Committee on Banking Supervision is asking banks for greater disclosure around their securities financing transactions (SFT).
Basel Committee revises SA-CCR leverage ratio treatment on client derivatives margins
Revisions have been made to the leverage ratio treatment of client cleared derivatives by the Basel Committee on Banking Supervision in the standardised approach to measuring counterparty credit risk exposures (SA-CCR).
The last word on Basel III: integration
As the finalised guidelines become regulation, an emphasis on relationships among different sources of risk confirms the need for a unified financial risk reporting solution. By Xavier Dubois, product manager, global risk and finance, at Wolters Kluwer.
Think tank pushes for tweaks to Basel III to support emerging market banks
The stringent requirements contained in Basel III are making life difficult for emerging market countries and their banks leading to calls for the regime to be better calibrated for their needs
EU moves towards its own crypto-asset regime
Reports from Esma and the EBA suggest that the EU is moving closer to creating its own regime for regulating crypto-assets potentially forcing member states, which take an early lead in this area, to revise their own crypto rules
Long-term recovery rates on corporate debt higher than Basel Committee estimates
Banks tend to recover more capital on defaulted corporates loans and do so more quickly than is widely assumed by regulators. However, this may not result in lower risk weightings for corporate loans anytime soon
US regulatory proposals pose concerns to foreign banks operating there
US regulators have put out a set of proposals to regulate foreign banks operating within their jurisdiction, which has raised considerable concern among some banks fearing they will lead to higher capital requirements and more stringent regulation
Former Fed official calls for more capital for G-SIBs criticised by BPI
In a speech on May 21, former Federal Reserve governor Daniel Tarullo criticised many of the current Republican administration’s regulatory reforms and said US Globally Systemically Important Banks (G-SIBs) should hold more capital.
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