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 […]

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 […]

Is the European Commission phasing out MREL?

It spooked the markets for good reasons, but the leaked EC document on the merger of TLAC and MREL did not receive the attention that it deserves. Yes, Reuters reported on the leaked Information Note from the Commission Services for the European Commission Expert Group on Banking, Payments and Insurance. However I am not sure […]

Results of EU consultation on bank financing are out

Following up on an earlier post, the EC now published the answers on its consultation on long term finance. Thought the topic is hot, only 87 responses were submitted*, of which only two by academics. One by Martin Hellwig, the other by Martien Lubberink. The low public participation by academics is depressing, given that they called […]

ECB goes soft on capital requirement harmonisation

The ECB just published their plans to harmonise Options and Discretions in the CCR available to Euro-zone banks. Initially, the ECB set promising expectations. It had identified a whopping 160 Options and Discretions, many of which were meant to be chopped. See this interview with a very confident Ignazio Angeloni some weeks ago. But the […]

Good luck harmonising European bank capital!

Following up on my post of some days ago on Europe’s efforts to harmonise bank capital, it dawned upon me that this harmonisation plan will probably not go well. Today, Danièle Nouy confirmed there will be a consultation on ECB’s efforts to harmonise Options and National Discretions (ONDs) in the CRR. Consultation, consultation, consultation. Mind […]

EBA and ECB living living together in harmony?

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, […]

In defence of bank DTAs

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. […]

How Sabine and Danièle coordinate

This post may be purely speculative. However, I noticed two important figureheads of EU bank supervision (Sabine Lautenschläger and Danièle Nouy) went public on two, apparently separate, issues. However, combined, they may show how EU bank supervision may develop. In the FT of February 24, Nouy showed a dramatic, but surely sensible, U-turn on the […]

Jay, the EBA and BCBS Basel III monitoring results are out

The EBA and the Basel committee just published the Basel III monitoring results. Click here to view the results of the EBA monitoring exercise. Click here to view the results of the BCBS monitoring exercise. Best is to describe the results using graphs, in this case from the EBA report. Note, these are results of […]