I added the NZ Open Bank Resolution framework to my list of links, on the left. This in light of the CoCo discussion on my blog. For ease of use, see below: NZ Recovery and Resolution A primer on Open Bank Resolution Open Bank Resolution Open Bank Resolution (OBR) policy – Q&A EU Recovery and Resolution… Read More Some housekeeping on CoCo’s
Lots of twitter-folks, especially law shunning economists, have only a slight clue as to what the Basel III implementation in Europe actually entails. So, here’s my briefings on Basel III. Note, I write this post as an economist, who, after a decade of academia subjected himself to five years of a regulators’ commitment to help… Read More Basel III’ is Europe – Part I
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.
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.
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
Bloomberg News reports quite accurately on BOA’s AOCI perils. Bank of America’s AOCI loss more than doubled to $7.71 billion at the end of June from $3.49 billion on March 31, according to figures released on the bank’s website.Under rules proposed by the Basel Committee on Banking Supervision, known as Basel III, the regulatory capital measure… Read More Another one (BOA) bites the AOCI dust.
It features on the EBA home page, but obscured by the the words “Single Rulebook Q&A”, it is a neat tool nevertheless. Click here for access.