FYI some documentation on the Leverage Ratio for EU banks

My post on EU leverage ratios yesterday attracted some comments on twitter, which may haven been triggered by misunderstandings. The CRR offers a short and clear summary of the Leverage Ratio definition in Article 429.1: “The leverage ratio shall be calculated as an institution’s capital measure divided by that institution’s total exposure measure and shall… Read More FYI some documentation on the Leverage Ratio for EU banks

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

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

I wrote on CoCos, again.

Under my pen-name “Martien Lubberink”, I wrote on CoCos, offering this part of the world a solution for mis selling them. I think my solution is superior than the ban of the FCA. See Let them eat CoCos?

Caveat emptor? We should probably do more than tell banks how to sell CoCos.

Last week, the three European financial regulators warned financial institutions that they should tread carefully when it comes to marketing CoCos: capital securities that may convert or be written off when a bank gets into trouble. The warning may have been prompted by the failure of UK’s Co-operative bank or Dutch bank SNS. These failures bailed-in… Read More Caveat emptor? We should probably do more than tell banks how to sell CoCos.

Told you so! EU regulators warn against selling coco’s to retail investors.

Cetier is happy today, knowing that the three EU financial market regulators read his post on Convertible Capital (CoCo hurdles). They read it many times and concluded he was right. Or maybe they read the post on Matt Kimball’s site, or the post on Pieria. Whichever post they read, they all originated from my keyboard,… Read More Told you so! EU regulators warn against selling coco’s to retail investors.

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!