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
From Bank Credit News, Alexandra Villarreal reports: Banking regulators, including the OCC, Federal Reserve and FDIC, approved a revised final rule on regulatory capital designed to bolster the U.S. financial system and reduce the regulatory burden on community banks. Aw well, some people in Basel may have had other ideas on bolstering and reducing the… Read More Additional tweaks for US Basel III implementation
I just checked the Basel III AOCI rule – discussed by Reuters last week – using real data from bank holding companies. This is what inclusion would amount to, using 12/31/2012 data from US bank holdings, including the unrealized gains currently excluded from capital: Name Leverage Ratio UR Gains filter LR w.o. filter bank of ny… Read More AOCI rule effects – nine banks affected.
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.
Berenberg presented an interesting 145 pager on Capital of European Banks. It should be downloadable from the FT site, click here.
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
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