Review of 2012: Basel III starts to bite
Capital and liquidity consumption now comes with a cost, and that started to make itself felt this year. Risk staff look back at a selection of the year’s big stories
On the face of it, there is not much to link JP Morgan’s credit trading losses with UBS’s decision to exit fixed income, nor to link either of those issues to the rise of swap futures contracts. But there is a common denominator – Basel III. The rules slap a higher price tag on the consumption of capital and liquidity, and began to dramatically reshape banks, markets and products this year.
In 2013, banks have a lot more work to do in terms of balancing funding and capital consumption against
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