When will the RBNZ admit its capital ratio definitions are bent? (And copy APRA’s plan to straighten them?)

Once in a while I meet bankers and bank regulators, sometimes over a cup of coffee, sometimes over a glass of Pinot Noir. In fact, I will attend an event with RBNZ’s Adrian Orr tomorrow. He will speak at the brand new PwC centre in Wellington. When it comes to bank capital, the narrative shared… Read More When will the RBNZ admit its capital ratio definitions are bent? (And copy APRA’s plan to straighten them?)

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European Commission slaps Dutch government on the wrist: the end of AT1 coupon tax deductibility?

Just the other day, the Dutch government announced plans to end the favorable tax treatment of CoCo securities. From 1 January 2019 onward, the tax deductibility of the coupon paid on Additional Tier 1 capital instruments will end. [1] See a Google translation of the announcement here. Such a change in tax treatment likely constitutes a Tax… Read More European Commission slaps Dutch government on the wrist: the end of AT1 coupon tax deductibility?

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RBNZ launches The Dashboard: an innovation in prudential bank disclosures

In a dash for more transparency, the Reserve Bank launched the Bank Financial Strength Dashboard. This is a truly innovative on-line tool for sharing prudential and financial information on New Zealand banks. The Dashboard contains more than 100 individual metrics on the financial strength of banks. The RBNZ updates the information every quarter. A world standard for bank disclosures? Compared to… Read More RBNZ launches The Dashboard: an innovation in prudential bank disclosures

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How questionable is the comparability of Basel risk weights in the EU banking sector?

In a couple of weeks’ time, at the FEBS conference in Rome, Stefan Kerbl and Zsofia Döme from the Austrian national bank (OENB), will present a paper on the comparability of Basel risk weights in the EU banking sector. The short story: according to Stefan and Zsofia there are significant differences in the ways European… Read More How questionable is the comparability of Basel risk weights in the EU banking sector?

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FYI some links to follow progress on EU banking regulation

On 7 March, the Permanent Representatives Committee (Coreper) of the European Council discussed the Presidency compromise texts of CRR 2, CRD 5, BRRD 2 and SRMR 2. If you are interested in the associated documents: Link to Presidency note Link CRD5 Presidency compromise, Procedure 2016/0364/COD Link CRR2 Presidency compromise, Procedure 2016/0360/COD Link BRRD 2 Presidency… Read More FYI some links to follow progress on EU banking regulation

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The European Commission’s proposal to accelerate the reduction of non-performing loans

This week the EC presented concrete steps to tackle non-performing loans, see this page. Ouch One and Ouch Two Two reasons why this is an interesting proposal. First, it forces banks to deduct any provisioning shortfalls directly from Common Equity Tier 1. Ouch! Second, the proposal amends the CRR, which is a Regulation. And we… Read More The European Commission’s proposal to accelerate the reduction of non-performing loans

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