CapitalRSS

FOMC reveals Fed worries about financial stability

Officials at the US Federal Reserve fear that the dramatic economic slump accompanied by the fastest pace of job losses in the country’s history due to measures to contain the Covid-19 pandemic could threaten financial stability. 

Banks alarmed over the possibility of negative UK interest rates

Commercial banks have waded into the Bank of England policy-makers’ debate over the possibility of imposing negative interest rates, warning that it would crush their earnings and diminish their ability to absorb an expected avalanche of bad loans as a result of the coronavirus crisis. 

ECB covid

Covid-19: European bank trading books pose financial stability risks

Though a decade of global financial reforms has made banks safer, the unusual nature of the Covid-19 pandemic nonetheless exposes European banks to greater than appreciated risks due to the opaque nature of their Level 2 and 3 assets

BCBS

Credit risk management under Basel IV and beyond

Under Basel IV, credit risk can no longer be addressed in isolation – but banks can take a holistic view, enabling them to better assess the impact of future scenarios on their activities. By Xavier Dubois, director of risk and finance at Wolters Kluwer Finance, Risk & Reporting.

Most Basel members not yet factoring climate change into prudential capital frameworks

In a survey, the Basel Committee on Banking Supervision found that most of its members prefer to address climate-related financial risks within their existing regulatory and supervisory frameworks, but there is still much work to be done.

Xavier Larrieu

Supervisors urge IFRS-9 forward provisioning flexibility to save capital

The Covid-19 pandemic is not only taking monetary and fiscal policy into new territory, but is also having an impact on how banks provision for bad loans under IFRS-9 accounting standards  

EBA agrees with changes to risk weight standards for specialised lending

Amendments to standards on risk weights for specialised lending exposures made by the European Commission have found approval with the European Banking Authority (EBA), which will endorse them.

Moody’s warns of growing vulnerability of banks as Covid crisis deepens

Though the economic shock from the Covid-19 pandemic has not led to immediate changes in the underlying credit strength of banks, many will become increasingly vulnerable as the crisis draws on, warned Moody’s Investors Service. 

Fitch Ratings to ignore ECL capital waiver for rating banks

Fitch Ratings said it will continue to consider EU banks' IFRS-9 expected credit losses (ECLs) alongside headline reported common equity Tier 1 (CET1) ratios, when rating their capital strength. 

Fed extends dates for parts of credit limit rule by 18 months

The US Federal Reserve has extended by 18 months initial compliance dates for parts of the single-counterparty credit limit rule.