Comments on RBNZ’s second capital review paper: What should qualify as bank capital?

The RBNZ wants to redefine capital. My comments are below. In short: don’t let perfection be the enemy of the good. The RBNZ runs the risk of achieving just what it does not want by going it alone. A DIY-definition of capital makes the Reserve Bank vulnerable to structuring. Moreover, the problems signalled by the Reserve […]

Kiwibank capital flip-flop

About a fortnight ago Kiwibank announced that its formerly disqualified capital instruments now re-qualify as capital. Yay! This after a the capital disqualification event on which I wrote not so long ago. There was almost no press coverage of the re-qualification. Yes, there was NBR’s Jenny Ruth who wrote a noisy and non-informative story on the […]

Kiwibank puts its money where its mouth should be

Kiwibank’s capital cock-up took an unexpected turn this week when the bank made another extraordinary announcement. On Friday, the bank let us know that its parents will bail out the bank with an infusion of $247 million of common equity. Sheesh, I thought only Italy did bail-outs! Infusing equity capital is the last thing a […]

Free rider problems and tax bills? The Kiwibank capital cock-up

On 15 March, New Zealand Kiwibank issued two odd statements regarding their Basel III compliant (or is it compliant) capital instruments. The announcements raised the prospect of disqualification of two capital instruments: the Tier 2 convertible subordinated bond issued on 6 June 2014 (Tier 2 Bond); and the Additional Tier 1 perpetual bond issued on 27 May […]

Sovereign Holdings by EU Banks

The EBA just published the results of the 2016 transparency exercise. Yay! The EBA decided to deliver on its promise to present more detailed data of individual banks. (I hope the EBA now forgives me for posting a critical note on their bank disclosure plans earlier this year.) I toyed a bit with the data […]

My contribution to the EBA Guidelines on disclosure requirements consultation

The European Banking Authority (EBA) launched a consultation on a set of Guidelines on regulatory disclosure requirements following an update of the Pillar 3 requirements by the Basel Committee in January 2015. These Guidelines are part of the EBA’s work to improve and enhance the consistency and comparability of institutions’ disclosures and aim to ensure […]