Europe
Climate shocks could cut ‘polluting’ EU funds’ value by 20%
Esma researchers say carbon-intensive funds also pose more of a systemic risk
BNP Paribas’s LCR hit record high in 2020 in wake of deposit glut
HQLA jumped 10% in Q4
At 40% of EU banks, credit risk own-funds deviate from benchmarks
Eleven banks lowballed capital requirements without justification in latest exercise
Fourteen EU banks face sanctions for poor market risk models
Twenty lenders lowballed capital requirements
Funds breathe out as EU regulators ease ESG data rules
Majority of mandatory indicators become optional in final draft of sustainability regulation
Model change pumps up Deutsche’s VAR capital charge
Switch to historical simulation approach increases requirement by 71%
EU’s initial margin relief may come too late for phase five
Long-awaited easing of model governance requirements unlikely to take effect by September
Euro banks’ trading activities pose lopsided risk to capital – ECB
Elevated downside risks to capital posed by net trading income
Isda plans ‘modular’ RFR conventions
Swaps definitions will be updated in response to divergent compounding styles in loan markets
Risk density of Santander’s securitisation book hits five-year high
Synthetic securitisations helped cap credit RWAs last year
EBA faces backlash over ‘green asset ratio’
Bankers reject proposed climate risk measure as flawed and even ‘dangerous’
EU banks expect OTC trading conditions to tighten
Credit conditions had eased in Q3 and Q4 2020, but were expected to get tougher in Q1
Non-cleared margin logjam looms after squandered delay
Fewer than half of phase five firms have submitted documentation necessary to open custody accounts
Top 10 op risks 2021: regulatory risk
Big dip in fines belies lingering fears over Covid loan mis-selling and sanctions risk
Top 10 op risks 2021: data compromise
Remote working elevates fears of data theft, misuse and abuse
Top 10 op risks 2021: third-party risk
Pandemic and shift to cloud computing inflame concerns for banks and regulators
Top 10 op risks 2021: theft and fraud
Changes in working practices since Covid shift angle of criminal attack on financial institutions
State Street to look after bitcoin, just don’t call it custody
The second-biggest custodian will provide “record-keeping services” for the unregulated asset
Optimisation firms prep for SA-CCR boom
Flush with new cash, vendors ready rebalancing services ahead of risk-sensitive leverage framework
High-earning banks set aside more Covid provisions – BIS
Provisions across 70 banks in H1 2020 were almost quadruple those taken in H2 2019
Callable repack frenzy opens up new options market in Europe
Demand driven mainly by French life insurers looking for alternatives to low-yielding sovereign bonds
Italian job: the real UK stock trading heist
Italy has not been seen as a candidate to pick up business from the UK – until now
UK banks count cost of EU software capital reversal
Average CET1 ratio would fall 29 basis points
Buy-side physical FX clearing at LCH faces scepticism
Lack of clearing mandate and settlement wrangles mean demand for putative service remains weak