That feeling when you notice that EU leverage ratio requirements are at risk

This week, the EBA and BCBS published the Basel III monitoring results. They show a further improvement of European banks’ capital positions, largely fulfilling the future regulatory capital requirements, with only a very small number of banks suffering from potential capital shortfalls. I found Figure 9 of the EBA report interesting. It shows the evolution […]

EBA updates its Risk Dashboard

The European Banking Authority (EBA) published today the periodical update to its Risk Dashboard summarizing the main risks and vulnerabilities in the banking sector on the basis of the evolution of a set of Risk Indicators (RI) across the EU. You really have to critically analyse this report, as it contains mixed messages on the capitalization […]

Is the European Commission phasing out MREL?

It spooked the markets for good reasons, but the leaked EC document on the merger of TLAC and MREL did not receive the attention that it deserves. Yes, Reuters reported on the leaked Information Note from the Commission Services for the European Commission Expert Group on Banking, Payments and Insurance. However I am not sure […]

Dutch CET1 and Leverage ratios

The EBA transparency exercise results offer a wealth of data. They will keep researchers busy for some months to come. The table below shows a couple of highlights, where all numbers are in %, and the data is sorted on 2015 Leverage ratio values: CET1 and Leverage Ratios are increasing. This is encouraging for sure. […]

Five years after the first Basel III coco issuance, the Netherlands “gets” CoCos.

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, […]

EBA and ECB living living together in harmony?

Last week, the EBA and the ECB published some thoughts on next steps in bank supervision. These did not attract a lot of media attention. However, in light of changes to come, I thought it be interesting to take a closer look. With Basel III in force in Europe through CRD IV, CRR and BRRD, […]

Greek Banks and Article 92 CRR

Silvia Merler published a great post on the solvency of Greek banks. Though she focuses on CET1 ratios, I just realised that Article 92 of the CRR requires this: 1.   Subject to Articles 93 and 94, institutions shall at all times satisfy the following own funds requirements: (a) a Common Equity Tier 1 capital ratio […]

UPDATE: The EBA’s laudable effort to tame Additional Tier 1 issuances

Today, the EBA held a public hearing on the 4 May report on AT1 issuances, see my previous post on this. Click here for the PowerPoint that the EBA prepared. Apparently no surprises. On the hot topic of Contingent Clauses, the EBA reports that it “confirms its previous reserves, and recommends disallowing contingent clauses”. A […]

The EBA’s laudable effort to tame Additional Tier 1 issuances

This week, the EBA issued its preliminary report on the monitoring of Additional Tier 1 (AT1) instruments of EU. It is a great document for outsiders to obtain a feel for what these instruments are like and how they behave in their regulated habitat. For example, an important critique pertains to the complexity of these […]

Jay, the EBA and BCBS Basel III monitoring results are out

The EBA and the Basel committee just published the Basel III monitoring results. Click here to view the results of the EBA monitoring exercise. Click here to view the results of the BCBS monitoring exercise. Best is to describe the results using graphs, in this case from the EBA report. Note, these are results of […]