And a quick follow-up from Basel on capital shortfalls. (Click here for the report.) From the press release: “Data as of 31 December 2012 show that shortfalls in the risk-based capital of large internationally active banks continue to shrink. The aggregate shortfall of Common Equity Tier 1 (CET1) capital with respect to the 4.5% minimum […]
Just a quicky – from EBA: it publishes today its fourth report of the Basel III monitoring exercise on the European banking system. Click here for the full report. “The exercise monitors the impact of the implementation of the Basel III requirements in the EU, based on the assumption of a full implementation of the […]
This week Bloomberg’s Charles Penty and Angeline Benoit reported on Banco de España’s efforts to apply a waiver for capital deductions originating from Deferred Tax assets. Now, discussions on deductions from regulatory capital are often passionate – they consume lots of resources. This post argues that elaborate and detailed discussions on capital deductions are probably […]
Note, the ratio values are over 0.08 (8%) – the max being 0.080 + 0.025 = 0.105 (10.5%). Graph made with GLE.
I updated this post, as discussions on the leverage ratio still suffer from a poor understanding of this solvency measure. See my post on this odd proposal by three Dutch professors, who basically want to turn back time to the Basel II (not III) era, and allow banks to borrow money to increase their capital […]
The answer is: Australia’s Commonwealth bank. As I will demonstrate, this bank is unique in going the extra mile. It shows that the Basel III disclosure requirements are not something to be afraid of. In fact, they are doable. But first, this entry explains the Basel III disclosure requirements. Though they are part and parcel […]
The WSJ and the FT this week reported on the leverage ratio. Over the summer, apparently, the leverage ratio has received more attention. The Risk-based Capital Ratio could explain this increased attention, as it relies on in-transparent risk weights. Look how it increased from 2008 on. Is the increase credibly supported by increased solvency? Graphs […]