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Capital and Prudential Standards Blog

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Overview of Basel Committee’s Revised Pillar 3 Disclosures

The Basel Committee has finalized its standard revising the Pillar 3 capital disclosures applicable to internationally active banks. Pillar 3 of the Basel framework aims to promote market discipline through qualitative and quantitative regulatory disclosure requirements, whereas Pillar 1 encompasses the framework of risk-based capital ratios and other quantitative requirements. Pillar 3 was first introduced in 2004 as part of Basel II and revised in 2009 as part of Basel 2.5. The newly finalized revisions will take effect concurrent with banks’ year-end 2016 financial reporting, superseding the earlier Pillar 3 standards (although other disclosure standards, such as the Basel III leverage ratio disclosure requirements published in January 2014, remain in force).…  Read More

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Overview of Basel Committee’s Revised Pillar 3 Disclosures

The Basel Committee has finalized its standard revising the Pillar 3 capital disclosures applicable to internationally active banks.  Pillar 3 of the Basel framework aims to promote market discipline through qualitative and quantitative regulatory disclosure requirements, whereas Pillar 1 encompasses the framework of risk-based capital ratios and other quantitative requirements.  Pillar 3 was first introduced in 2004 as part of Basel II and revised in 2009 as part of Basel 2.5.  The newly finalized revisions will take effect concurrent with banks’ year-end 2016 financial reporting, superseding the earlier Pillar 3 standards (although other disclosure standards, such as the Basel III leverage ratio disclosure requirements published in January 2014, remain in force). …  Read More

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Basel Committee’s 2015-2016 Work Program

On Friday, January 23, 2015, the Basel Committee published its regulatory work program for 2015 and 2016, summarizing the policy initiatives the Committee is expected to undertake as it continues to propose and finalize the remaining elements of its Basel III regulatory reform agenda.  The Committee’s work program is organized around the following four themes:

  • Developing and finalizing specific policy measures from the Committee’s post-crisis reform agenda;
  • Assessing the Basel III framework’s overall balance between simplicity, comparability and risk sensitivity;
  • Monitoring national regulators’ implementation of the Basel III framework; and
  • Improving the effectiveness of banking supervision.
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Risk Governance: Visual Memorandum on Final Guidelines Issued by the OCC

The OCC has issued final risk governance guidelines that formalize its heightened expectations for large national banks and federal savings associations. The risk governance guidelines set new, and much higher, minimum standards for the design and implementation of a bank’s own risk governance framework and the oversight of such framework by the bank’s board of directors. The guidelines are enforceable under the OCC’s statutory authority to prescribe operational and managerial standards for national banks and federal savings associations.

State banks that are not subject to the OCC’s risk governance guidelines should still pay attention because the same or similar principles will likely be applied by the Federal Reserve and the FDIC to large state member and non-member banks.…  Read More

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Blackline of Federal Reserve’s Revisions to Capital Planning and Stress Testing Rules

The Federal Reserve has issued a final rule that amends certain aspects of its capital planning and stress testing regulations.  We have prepared a blackline (available here) of the Federal Reserve’s final rule against the proposed rule issued in June 2014.

View Blackline of Federal Reserve’s Revisions to Capital Planning and Stress Testing Rules

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Supplementary Leverage Ratio (SLR): Visual Memorandum

The U.S. banking agencies have finalized revisions to the denominator of the supplementary leverage ratio (SLR), which include a number of key changes and clarifications to their April 2014 proposal. The SLR represents the U.S. implementation of the Basel III leverage ratio. Under the U.S. banking agencies’ SLR framework, advanced approaches firms must maintain a minimum SLR of 3%, while the 8 U.S. bank holding companies that have been identified as global systemically important banks (U.S. G-SIBs) and their U.S. insured depository institution subsidiaries are subject to enhanced SLR standards.…  Read More

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