This week, the government of the Netherlands will decide about floating ABN Amro. This after a perilous and turbulent recent past. Apparently, the float will be compromised: a management-friendly foundation will be the new owner. That foundation then will issue certificates to investors. This protects ABN Amro against a hostile take-over. The structure raises two… Read More Re-post from March 27, 2014: ABN AMRO, direct issuance, and CRD IV
Last week, the EBA and the ECB published some thoughts on next steps in bank supervision. These did not attract a lot of media attention. However, in light of changes to come, I thought it be interesting to take a closer look. With Basel III in force in Europe through CRD IV, CRR and BRRD,… Read More EBA and ECB living living together in harmony?
Frances Coppola this week posted on her blog an explanation of Capital, liquidity and the countercyclical buffer, in plain English. Frances posted because of Caroline Binham’s use of language in a Financial Times article. Caroline, according to Frances, is wrong. So wrong even that she takes it out on Caroline, blaming her for not being… Read More The language of Capital and Equity
Over the last weeks, the issue of bank Deferred Tax Assets (DTAs) came up again. What does not really help ending this story is the confusion on the subject of DTAs. Let me make a stab in trying to end the DTA confusion. Here are some snippets that from various news sources that I gathered.… Read More In defence of bank DTAs
It is that time of the year: the Basel III monitoring reports are out. The Basel report can be found here. The EBA report can be found here. Highlights from the EBA report: CET1 ratios are steadily increasing – Compared with the previous exercise (reference date June 2014), the average CET1 ratio of Group 1 banks increased by 0.5… Read More Jay, the EBA and BCBS Basel III monitoring results are out!
The Chicago Fed offers great data on bank holding companies, click here for the full page, and here for the download page. The data is big, deep, large. The number of variables is stunning (more than 3,000). The format is a flat text file with a typical delimiter: a caret (^) separates the data fields. How to… Read More A python script to manage regulatory data of U.S. Bank Holding Companies
Just before the summer break, the EC published a consultation on the effects of higher bank capital requirements under the CRR. Time to pay back! This is an important consultation, as generally only interested parties (banks) contribute. Unfortunately, in particular academics stay away from these consultations. This is depressing. Given that European academics seldom work for private… Read More The European Commission consults on CRR and CRD IV and on bank financing
The Federal Reserve Board on Monday approved a final rule requiring the largest, most systemically important U.S. bank holding companies to further strengthen their capital positions. This is a move in the right direction. See here the FED press release. See here the underlying pdf. See here the document on calibrating the GSIB Surcharge.
Buy one get one free: The European Banking Authority (EBA) published today a tentative sample of banks taking part in the 2015 transparency exercise, together with the draft templates illustrating the type of data that will be disclosed. In addition, following the approval by its Board of Supervisors, the EBA released the key features and… Read More EBA discloses 2015 transparency exercise & key features of 2016 EU-wide stress test
Silvia Merler published a great post on the solvency of Greek banks. Though she focuses on CET1 ratios, I just realised that Article 92 of the CRR requires this: 1. Subject to Articles 93 and 94, institutions shall at all times satisfy the following own funds requirements: (a) a Common Equity Tier 1 capital ratio… Read More Greek Banks and Article 92 CRR