More AOCI bashing

Banks again blame the accounts for their own abysmal performance. More worryingly is the way the press reports on this. See Business Report writing it up: Wells Fargo and JPMorgan Chase, the most profitable US banks, lost $6.5 billion in combined equity in the second quarter as rising interest rates and falling bond prices threaten… Read More More AOCI bashing

JPM and Accumulated Other Comprehensive Income – a neat example of regulatory capture.

It should not come as a surprise that the discussion on the in/exclusion of Accumulated Other Comprehensive Income from Regulatory Capital continues. JPM highlighted one reason for keeping the discussion on AOCI going, as most of it evaporated – with consequences. Sad. In the spring of 2008, just days apart from the collapse of Bear… Read More JPM and Accumulated Other Comprehensive Income – a neat example of regulatory capture.

Basel III, US, and AOCI

An interesting aside of the US Basel III adoption is the relief of the inclusion of Accumulated Other Comprehensive Income (AOCI). Its inclusion in Common Equity Tier 1 regulatory capital (CET1) is only mandatory under the final rules for banks subject to the advanced approach, which is applicable to banks with total assets of $250… Read More Basel III, US, and AOCI

US adopts Basel III

The US adoption of Basel III attracted some discussion on the leverage ratio, see Bloomberg, fuelled by a comment from Daniel Tarullo: “The Basel III leverage ratio seems to have been set too low to be an effective counterpart to the combination of risk-weighted capital measures that have been agreed internationally.” (RTRS) This comment nicely… Read More US adopts Basel III