EBA rate risk guidelines ease deposit cap
Greater flexibility welcomed, but problems may remain for mortgage lenders
A controversial cap on the estimated duration of deposits in bank interest rate risk calculations has been eased in new guidelines published by the European Banking Authority (EBA) today.
Industry groups had feared no individual deposit would be allowed to have a maturity of more than five years in supervisory tests, but the EBA has instead opted to set five years as the maximum maturity that can be achieved on average. That creates enough wiggle-room for an ordinary retail bank to sail through
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