Recent changes to the US tax code involving less generous treatment on certain deductions could result in greater cyclicality of higher leveraged banks and non-financial firms making them more sensitive to swings in the economic cycle and potentially undermining bank capital buffers. By Justin Pugsley.
Capital
US dollar borrowing being driven by debt securities
US dollar credit to non-banks based outside the US continued to grow at a steady clip, driven by debt securities issuance
US regulatory framework for big banks to become more risk sensitive
US Federal Reserve vice chairman of supervision advocates a more risk sensitive approach to regulating and supervising big banks by taking more account of complexity and interconnectedness.
FSB draws mixed responses over infrastructure finance findings
Market participants and industry associations have given mixed reactions to the FSB’s findings on the impact of regulation on infrastructure finance. By Farah Khalique.
UK could remove risk-free classification on EU member state sovereign bonds
UK regulators could insist that holdings of EU member state sovereign bonds lose their zero-risk weightings in the event of a no-deal Brexit
Basel Committee keen to revisit treatment of sovereign exposures
The Basel Committee’s latest work programme priorities include revisiting the treatment of sovereign exposures, revisions to the market risk framework, the Pillar 3 disclosure framework and accounting provisions.
France enacts counter-cyclical buffer as ECB looks to exit ultra-lose monetary policy
French regulators tell banks to enact counter-cyclical buffer to meet potential threats to the economy
China winning battle against financial risks
China’s regulators appear to be winning their multi-year battle to curb risks to their financial system, according to a leading credit rating agency.
Streamlining Volcker Rule will prove challenging
The Volcker Rule was hastily drafted after the global financial crisis and it soon emerged that it was significantly flawed. The five US agencies that oversee it are now revising it so it works better, which is no easy task. By Justin Pugsley.
Risk-sharing: the EU headache that won't go away
Risk reduction is high on the banking agenda within the EU, but despite ministers agreeing on a package of reforms, a lack of trust is hindering much-needed progress on risk sharing. By Farah Khalique.
