Consultation on excluding large custody banks from parts of supplementary leverage ratio

Banks engaged mainly in custodial activities should be able to exclude deposits at central banks from their supplementary leverage ratio, according to the three main US prudential regulators.

Charlie Browne

Banks should think twice before diving head first into the data pool

Data pooling has emerged as a strong contender for meeting non-modellable risk factors in FRTB. However, it is far from being a perfect solution and at worst it could be a distraction

EU banking package could restrict AT1 capital payouts

The recently agreed EU risk reduction banking package could make it harder for global systemically important institutions (G-SIIs) to make payouts on their additional tier 1 (AT1) securities due to a leverage ratio buffer requirement, said Scope Ratings in a report.

EU flag

Bond diversification may not break 'doom loop' for all European banks

Moves are afoot within the eurozone to force banks to diversify their holdings of bonds for regulatory capital to help end the 'doom loop' between banks and their host countries. However, a new paper argues that such efforts could be counterproductive

Standard setters give regulatory relief for some legacy swaps

Global standard setters said legacy non-centrally cleared derivative contracts do not need amending to address interest rate benchmark reforms and do not need to apply margin requirements.

US needs high bar to activate counter cyclical buffer

The bar for activating the counter cyclical capital buffer (CCyB) would have to be a high one as the US capital framework is designed to sustain high levels of capital, said Randal Quarles, vice chair for supervision at the US Federal Reserve Board.

European banks to be hardest hit by Basel rules forcing them to increase capital

Basel III/IV rules are set to hit European banks the hardest with many of them holding retail mortgages, corporate loans and will be subject to constraints on internal models, meaning they will have to increase their capital, said Moody’s Investors Service in a research note.

Limits proposed on G-SIBs buying each others' TLAC debt

US regulators are consulting on measures to discourage globally systemically important banks (G-SIBs) from purchasing large amount of each others' total loss-absorbing capacity (TLAC) debt in a bid to reduce interconnectedness between large banks.

Basel Committee to decide on prudential treatment of crypto-assets

In due course the prudential treatment of crypto-asset exposures by banks is to be clarified to reflect their high degree of risk, the Basel Committee on Banking Supervision said in a statement, which included guidelines on how banks should manage this type of asset.

Strong case for external auditors to check RWA, says BCBS’s Coen

Auditors should check banks’ calculations of their risk weighted assets (RWAs) to reduce the chance of inaccuracies said Bill Coen, the secretary general of the Basel Committee on Banking Supervision (BCBS).