Orr’s monologue on bank capital at the Financial Stability Review presentation this week was a freshening surprise. No longer the wallflower of kiwi prudential supervision, Orr elevated bank capital to the top spot of priorities. Reinforcing Orr’s FSR rant monologue, the reserve bank published a short and clear speech, announcing its position on bank capital: “… New… Read More RBNZ takes position on bank capital
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… Read More Results of EU consultation on bank financing are out
Today, the EBA presented the 2015 EU-wide transparency exercise results. I am reading the data, which shows improvements in the resilience of the EU banking sector, covers around 70% of total EU banking assets for the reference dates of 31 December 2014 and 30 June 2015. (Some banks have not even published their capital positions… Read More Yay! EBA presents the 2015 EU-wide transparency exercise results
Uh oh, Jeroen Dijsselbloem form the Netherlands got into rough water this week: Dutch newspaper NRC had a nice scoop that showed how he relied on ING word smiths for writing a tax rule that renders bank capital instruments (CoCos) tax deductible, see full freedom of information documentation here. How bad is this? End 2013,… Read More Five years after the first Basel III coco issuance, the Netherlands “gets” CoCos.
Last November, the Financial Stability Board (FSB) presented its consultation document on Total Loss Absorbency Capacity (TLAC). The document is a response to the request of G20 leaders to enhance the loss-absorbing capacity of global systemically important banks (G-SIBs) in resolution. It presents a term-sheet with requirements for TLAC. The document looks heavy-handed because of… Read More Good, bad, and ugly questions about TLAC
Here is the final report, the Murray Report on Australian banks. Not so long ago Australia was the poster-boy of prudent banking. Unfortunately, this is not the case any longer. Ozzy banks need more resilient capital. Without further ado, please read. I will do too.
I used the stress test data to compute the gap between the leverage ratio and the risk-weighted ratio (CET1 ratio). The ECB data offers the leverage ratio data inputs. To measure the ratios by country, I used the totals of A3 and A4 for the CET1 ratio and the totals for A3 and A5 for Leverage… Read More EU Leverage Ratio Gap
With Matt Levine I share the fascination for the deal that featured in last week’s This American Life and in Propublica. I also wonder why actually this deal would be shady, as the Propublica story wants us to believe. Though Matt does a fair amount of explaining, the deal involves a simple transaction, recorded by two one journal entry. It… Read More How shady actually was the Santander-Goldman deal?
Today both the EBA and the Basel committee published their Basel III monitoring reports. These reports measure the progress banks make regarding the implementation of the new bank capital rules. The results look encouraging, banks have added capital since the April 2009 G20, shortfalls are lower than before, and not near the voodoo stories… Read More Bank capital on track
BPCE (A2/A/A) announced a benchmark USD RegS/144A dated Tier 2 transaction with IPTs of UST+230bps area. HSBC Bank Plc (Aa3/AA-/AA-) is expected to issue its inaugural multi-currency AT1 transaction this week following a global investor roadshow. Credit Agricole (A2/A/A) is holding investor meetings in the US and Europe starting from 8 September for a possible… Read More The market for hybrids is open for business!