This week the BOE published a consultation paper on changes to its rules regarding EU’s CRD IV. In it the BOE fills in any blanks left by the CRD IV. Clearly noticeable is BOE’s stance on a bank’s holdings in other banks and insurers. It’s tough! Where some continental supervisors support the arcane bank-assurance model, BOE… Read More BOE reveals tough stance on CRD IV rules for holdings in banks and insurers
I embarked on a nice research result that may feed into the Basel discussion on the risk-based solvency framework (clik here for the DP). One would think that Tier 1 capital serves a solvency purpose, and therefore it would present a more conservative picture of a bank’s solvency. For U.S. Bank Holding Companies over 2001-2012,… Read More Spot the differences: Tier 1 versus Equity for U.S. Bank Holding Companies
EBA yesterday published a Discussion Paper (DP) on the exclusion of unrealized gains from regulatory capital. As an advice to the European Commission it basically supports the current European system of prudential filters – that is, only the unrealized gains part (banks will have to include unrealized losses into capital). EBA’s departure from Basel III… Read More EBA leans against Basel III in excluding unrealized gains from Regulatory Capital
This is complicated material. But … looking at Article 9 of this standard, the bar for recognition of supplementary capital looks high. Even though it applies after the entry into force of Regulation (EU) No 575/2013 (CRR) and only when both CRR and Solvency (2009/138/EC) apply. The requirements are stacked up high! Article 9 says basically this: a solvency… Read More ESA’s tough final Regulatory Standards on conglomerate capital are out.
Interesting report by the FSI of a survey on Basel II, 2.5 and III Implementation, more or less worldwide – that is, ex-Basel member states. (For the Basel countries there are separate reports). Click here for the report.
The EBA published the first final draft technical standards on own funds. Its actually a bundle that complements CRR IV, the new European regulation on capital. Haven’t had the time to digest fthe final versions, but there are four pieces, according to the EBA website: The RTS on own funds part I specify elements of… Read More Jay! EBA publishes first final draft technical standards on own funds.
Just returning from a talk by Sir David Tweedie. Funny as always and sharp, he discussed a short history on accounting standard setting. He spared few parties, with France taking most of his flak. Perhaps Sir David has a point. Accounting standard setting would be different if France was not involved. But why blame France?… Read More What actually is Basel’s contribution to the new IASB impairment model?
I’m following up on my post yesterday of the EBA initiative to preserve nominal amounts of bank capital. I noticed that EBA wants to monitor this preservation initiative by requiring individual banks to hand over capital restoration plans. Now the US too wants access to bank data, reports the FT. This further compromises the autonomy… Read More US sides with EBA on Bank Data Sharing
Today the EBA made an announcement that requires banks to hold nominal amounts of capital over amounts previously set out in a recommendation set out a year ago. When banks’ capital levels fall below the nominal floor, they will have to present credible plans for restoration. This looks like a novelty, as banks are used… Read More EBA requires banks to hold Nominal capital levels
A large document for sure, and relevant, as accounting is the prime source of capital values. Shaun Drummon of AFR notices the Board’s stance on AOCI: “One of the most controversial has been the liberal use of other comprehensive income (OCI), otherwise known as the reserve, in revisions to accounting rules to park movements in… Read More IASB’s stance on AOCI Discussion Paper on the new Conceptual Framework