Tag Archive: Capital requirement


In one the recent release the European Banking Authority (EBA) published a press release and consultation paper on a draft recommendation BTXtODVCQAALUawon the use of Legal Entity Identifiers (LEIs). The consultation remains open for comment until 28 November 2013.

The EBA has developed draft Implementing Technical Standards on Supervisory Reporting (ITS) pursuant to the Capital Requirements Regulation (CRR). The ITS address the reporting of:

Recalling 4 years back , the world’s largest banks have been up in arms over threats by regulators to increase their A(equity) capital requirements. Making banks hold more capital, they argue, will force them to reduce lending and will increase their cost of funding, making credit more expensive throughout the economy. One of the chief defenders of the mega banks has been Josef Ackermann, CEO of Deutsche Bank until last year and also chair of the Institute of International Finance, which claimed that higher capital requirements would reduce economic output by a whopping 3.2 percent.

Was going through the new book by Anat Admati and Martin Hellwig The Banker’s New Clothes they have been tirelessly debunking the myth that higher capital levels will force banks to curtail lending and torpedo the global economy,. Some of the arguments against higher capital requirements are simply incoherent, like the idea that banks would be forced to set aside capital instead of lending it. Continue reading

Basel

The largest U.S. banks… would have to hold capital in excess of Basel III standards under a proposal being drafted by Senate Democrats and Republicans to curb the size of too-big-to-fail banks.
The current draft of the legislation would require U.S. regulators to replace Basel III requirements with a higher capital standard: 10 percent for all banks and an additional surcharge of 5 percent for institutions with more than $400 billion in assets. Continue reading

Bank For International Settlements (BIS) has come out with a consultative documents to revise market risk framework and the proposed a number of specific measures to improve trading book capital requirements. These proposals reflect the Committee‘s increased focus on achieving a regulatory framework that can be implemented consistently by supervisors and which achieves comparable levels of capital across jurisdictions. Continue reading

%d bloggers like this: