In March 2009, the International Accounting Standards Board started an ambitious plan to make accounting for banks easier to understand. In no less than 97 pages, the IABS laid out its plan to reduce complexity in the reporting of financial instruments.* At the time, the IASB did the right thing. The standard in force was too complex.… Read More No battle plan survives first contact with the enemy
The EBA just published the results of the 2016 transparency exercise. Yay! The EBA decided to deliver on its promise to present more detailed data of individual banks. (I hope the EBA now forgives me for posting a critical note on their bank disclosure plans earlier this year.) I toyed a bit with the data… Read More Sovereign Holdings by EU Banks
Following up on my post of some days ago on Europe’s efforts to harmonise bank capital, it dawned upon me that this harmonisation plan will probably not go well. Today, Danièle Nouy confirmed there will be a consultation on ECB’s efforts to harmonise Options and National Discretions (ONDs) in the CRR. Consultation, consultation, consultation. Mind… Read More Good luck harmonising European bank capital!
Frances Coppola this week posted on her blog an explanation of Capital, liquidity and the countercyclical buffer, in plain English. Frances posted because of Caroline Binham’s use of language in a Financial Times article. Caroline, according to Frances, is wrong. So wrong even that she takes it out on Caroline, blaming her for not being… Read More The language of Capital and Equity
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!
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
Last week BOE’s Prudential Regulation Authority presented its Statement on Strengthening capital standards; which provides clarity on bank capital rules after the consultation of August last year. It was about time, given that the new capital rules under CRR IV enter into force in about one month from now. With a 7% CET1 requirement, the BOE presents a… Read More BOE Announces its Position on Capital under CRR IV