Convertible Capital Hurdles

There is a vibrant debate going on regarding convertible capital or coco’s, see for example this recent paper from the U.S. treasury. On first sight a coco looks great.  In going concern there is a…

EU conglomerate capital rules expose ING’s weak group capital

This week ING revealed its plans to spin off its Korean insurance unit, see this link from Bloomberg. This made me wonder how this bank-assurer would fare under the current capital rules for conglomerates. The…

EBA leans against Basel III in excluding unrealized gains from Regulatory Capital

EBA yesterday published a Discussion Paper (DP) on the exclusion of unrealized gains from regulatory capital. As an advice to the European Commission it basically supports  the current European system of prudential filters – that…

ESA’s tough final Regulatory Standards on conglomerate capital are out.

This is complicated material. But … looking at Article 9 of this standard, the bar for recognition of supplementary capital looks high. Even though it applies after the entry into force of Regulation (EU) No 575/2013 (CRR) and…

US sides with EBA on Bank Data Sharing

I’m following up on my post yesterday of the EBA initiative to preserve nominal amounts of bank capital. I noticed that EBA wants to monitor this preservation initiative by requiring individual banks to hand over…

EBA requires banks to hold Nominal capital levels

Today the EBA made an announcement that requires banks to hold nominal amounts of capital over amounts previously set out in a recommendation set out a year ago. When banks’ capital levels fall below the…

Europe’s painful phase-out of old-style capital instruments

Matthew Attwood in Financial News reports on the difficulties that European banks face when replacing pre-crises capital instruments by Basel III compliant instruments. This was a small disaster waiting to happen, as Bazel III rules made…

Basel III, US, and AOCI

An interesting aside of the US Basel III adoption is the relief of the inclusion of Accumulated Other Comprehensive Income (AOCI). Its inclusion in Common Equity Tier 1 regulatory capital (CET1) is only mandatory under…