Are the Reserve Bank capital plans really about conduct risk?

Today, I submitted my comments on our Reserve Bank’s 4th capital consultation paper. The RBNZ wants banks to meet stiff new capital requirements. For common equity, the ratio requirement will increase by a whopping 5 percent, with a 1.5 percent countercyclical buffer requirement on top. Total capital requirements will be 17 percent. There will be… Read More Are the Reserve Bank capital plans really about conduct risk?

CRD V update

Agreed, a bit late to the party, but here are some links to the set of revised rules aimed at reducing risks in the EU banking sector: Presser Text of the political agreement on the capital requirements regulation (EU) 575/2013 Text of the political agreement on the capital requirements directive 2013/36/EU Text of the political… Read More CRD V update

Are UK’s countercyclical capital buffers high?

The Bank of England stress test results are out. A comprehensive report covering this exercise can be found here.  The report surprised me a bit, because its repeatedly mentions the countercyclical capital buffer requirement. The BOE decided to keep at 1 percent. Hardly newsworthy, that percentage was announced a year ago. Still, the report mentions… Read More Are UK’s countercyclical capital buffers high?

RBNZ takes position on bank capital

Orr’s monologue on bank capital at the Financial Stability Review presentation this week was a freshening surprise. No longer the wallflower of kiwi prudential supervision, Orr elevated bank capital to the top spot of priorities. Reinforcing Orr’s FSR rant monologue, the reserve bank published a short and clear speech, announcing its position on bank capital: “… New… Read More RBNZ takes position on bank capital

Has the reserve bank become too philosophical about bank capital?

“You guys are little bit philosophical: the Netherlands and France are the only two countries in Europe that haven’t taken a position on capital requirements.” That was Emil from Nomura, who, in early 2012, queried me about the Dutch position on minimal capital requirements. The Swedish bank authorities had just announced that capital ratios should be… Read More Has the reserve bank become too philosophical about bank capital?

When will the RBNZ admit its capital ratio definitions are bent? (And copy APRA’s plan to straighten them?)

Once in a while I meet bankers and bank regulators, sometimes over a cup of coffee, sometimes over a glass of Pinot Noir. In fact, I will attend an event with RBNZ’s Adrian Orr tomorrow. He will speak at the brand new PwC centre in Wellington. When it comes to bank capital, the narrative shared… Read More When will the RBNZ admit its capital ratio definitions are bent? (And copy APRA’s plan to straighten them?)

European Commission slaps Dutch government on the wrist: the end of AT1 coupon tax deductibility?

Just the other day, the Dutch government announced plans to end the favorable tax treatment of CoCo securities. From 1 January 2019 onward, the tax deductibility of the coupon paid on Additional Tier 1 capital instruments will end. [1] See a Google translation of the announcement here. Such a change in tax treatment likely constitutes a Tax… Read More European Commission slaps Dutch government on the wrist: the end of AT1 coupon tax deductibility?