Basel Committee on Banking Supervision (BCBS)
It will end in tiers
Regulators are intent on bolstering capital at financial institutions, with most citing common equity as the key component needed to absorb losses in financial downturns. What implications does this have for mutually owned institutions, and what can they…
Exceptions to the rule
Regulators have traditionally seen value-at-risk exceptions as an early warning of weaknesses in bank risk models. However, the financial crisis has shown VAR exceptions cannot be used to predict bank failures or distress.
The thirst for liquidity
Bank supervisors the world over are set to revise liquidity requirements for financial institutions in a bid to improve financial stability. But the banking community – already struggling under the weight of new regulation – is not convinced the efforts…
Capital punishment?
At a landmark meeting early this month, the Basel Committee will finalise its proposals for a host of measures, including counter-cyclical capital buffers and a leverage ratio. The consultation in early 2010 will be the industry’s last chance to fight…
New FSA liquidity rules aim to strengthen UK banking industry
David Ellis and Silvano Stagni consider whether the UK is looking to lead the shape of the new regulatory order, whether there is a ‘first-mover advantage’ and whether, acting alone, it can control financial liquidity in enough depth to put the UK’s…
Confidence crunch
Many financial institutions calibrate their required level of economic capital by considering the probability of default associated with a target debt rating. However, as the financial crisis has shown, confidence in a bank can erode before its Tier I cap
No accounting for leverage
The Basel Committee is set to unveil proposals for a leverage ratio in December as a means of constraining the excessive growth of bank balance sheets. But risk managers warn the proposals risk creating an unlevel playing field between US and European…
Being stressed is good for you
Increased regulatory focus means stress testing can no longer play a minor role in banks’ strategic thinking and capital considerations. Many institutions require cultural and procedural change to make this happen, but are they capable of bringing it…
Confidence crunch
Many financial institutions calibrate their required level of economic capital by considering the probability of default associated with a target debt rating. However, as the financial crisis has shown, confidence in a bank can erode before its Tier I…
The liquidity lifeline
The Basel Committee intends to introduce internationally binding liquidity standards, to include both a requirement for a liquid assets buffer and longer-term structural funding constraints. How will the measures be calculated and what will the…