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?)

RBNZ launches The Dashboard: an innovation in prudential bank disclosures

In a dash for more transparency, the Reserve Bank launched the Bank Financial Strength Dashboard. This is a truly innovative on-line tool for sharing prudential and financial information on New Zealand banks. The Dashboard contains more than 100 individual metrics on the financial strength of banks. The RBNZ updates the information every quarter. A world standard for bank disclosures? Compared to… Read More RBNZ launches The Dashboard: an innovation in prudential bank disclosures

How questionable is the comparability of Basel risk weights in the EU banking sector?

In a couple of weeks’ time, at the FEBS conference in Rome, Stefan Kerbl and Zsofia Döme from the Austrian national bank (OENB), will present a paper on the comparability of Basel risk weights in the EU banking sector. The short story: according to Stefan and Zsofia there are significant differences in the ways European… Read More How questionable is the comparability of Basel risk weights in the EU banking sector?

FYI some links to follow progress on EU banking regulation

On 7 March, the Permanent Representatives Committee (Coreper) of the European Council discussed the Presidency compromise texts of CRR 2, CRD 5, BRRD 2 and SRMR 2. If you are interested in the associated documents: Link to Presidency note Link CRD5 Presidency compromise, Procedure 2016/0364/COD Link CRR2 Presidency compromise, Procedure 2016/0360/COD Link BRRD 2 Presidency… Read More FYI some links to follow progress on EU banking regulation

The European Commission’s proposal to accelerate the reduction of non-performing loans

This week the EC presented concrete steps to tackle non-performing loans, see this page. Ouch One and Ouch Two Two reasons why this is an interesting proposal. First, it forces banks to deduct any provisioning shortfalls directly from Common Equity Tier 1. Ouch! Second, the proposal amends the CRR, which is a Regulation. And we… Read More The European Commission’s proposal to accelerate the reduction of non-performing loans