Bank of America, nothing complex, it’s noblesse oblige!

What surprised me this week about the capital calculation cock-up of Bank of America Meryll Linch were the reactions of the press. The financial press responded to this gaffe by highlighting the difficulties of calculating capital. Reuters, for example wrote: “The announcement illustrates how difficult it is to determine appropriate capital levels for the biggest banks.” Capital… Read More Bank of America, nothing complex, it’s noblesse oblige!

EU publishes a neat overview of progress on technical standards for banks.

With the new EU banks rules stacking up rapidly, the demand for road-maps on regulation increases. The EU offers a neat one: the overview and state of play of RTS relating to CRR / CRD IV. It shows that progress has been made. However, still Europe has plans for many new standards. Gleaning from the chart, the EC and… Read More EU publishes a neat overview of progress on technical standards for banks.

Jay! The CRD IV Technical Standards on Own Funds are out!

The Council of the EU has published a document attaching the text of a European Commission Delegated Regulation of 7 January 2014 supplementing the Capital Requirements Regulation (575/2013) with regard to regulatory technical standards for own funds requirements for institutions (document C(2013) 9763 final). The Regulation will enter into force on the 20th day following its publication in… Read More Jay! The CRD IV Technical Standards on Own Funds are out!

Do Regulatory Bank Capital Adjustments actually work?

This recent social science research network paper (A primer on regulatory bank capital adjustments) examines regulatory adjustments. These are adjustments that banks apply to book equity to calculate Tier 1 regulatory capital. The paper, relying on U.S. data, documents a decreasing relation between regulatory adjustments and bank solvency. Specifically, low solvency banks benefit from regulatory… Read More Do Regulatory Bank Capital Adjustments actually work?

EBA advises Europe to overturn Basel III rule on unrealized gains

Among the many publications that the EBA posted on its website last week, the Technical advice to the Commission (EC) on the treatment of unrealized gains deserves attention. Not only because of its content, but also because of the clarity, depth, and breadth of covering the issue of unrealized gains. Here is the context: EBA’s advice… Read More EBA advises Europe to overturn Basel III rule on unrealized gains

Even better: EBA presents its EU-wide Transparency Exercise Results

Adding to my backlog of actions to comment on, EBA parcels out one interesting feature after the other. It just posted the results of the EU-wide transparency exercise. It provides updated information on the European banks that were part of the recapitalisation exercise in 2012. The information covers data on banks’ composition of capital, composition… Read More Even better: EBA presents its EU-wide Transparency Exercise Results

Excellent: EBA publishes final draft technical standards on own funds

Having worked hard and diligently: the European Banking Authority (EBA) published today its final draft Regulatory Technical Standards (RTS) on own funds (=regulatory capital) ‘Part three’, which set out criteria to deduct indirect and synthetic holdings, to define broad market indices, and to calculate minority interest. On deduction of indirect and synthetic holdings: to achieve… Read More Excellent: EBA publishes final draft technical standards on own funds