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Capital and Prudential Standards Blog

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Home 2014 (Page 9)
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Overview of Basel Committee’s Proposed Revisions to Basel III Net Stable Funding Ratio

[Detailed client memorandum to come.] Today, the Basel Committee proposed revisions to the Basel III net stable funding ratio (NSFR).  The original version of the NSFR was published in December 2010.

Background:  Part of the Basel III liquidity coverage ratio, the NSFR requires banking organizations to maintain a stable funding profile in relation to the composition of their assets and off-balance sheet activities.  The NSFR is defined as the amount of available stable funding (ASF) relative to the amount of required stable funding (RSF). …  Read More

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Davis Polk Blackline of Basel Committee’s Revisions to Basel III Leverage Ratio

[Detailed client memorandum to come.] We have prepared a blackline that compares the Basel Committee’s January 2014 final revisions to the Basel III leverage ratio to the June 2013 proposed revisions.  We will be publishing a client memorandum that discusses the key changes to the Basel III leverage ratio.

Background:  Today, the Basel Committee issued final revisions to the Basel III leverage ratio framework and disclosure requirements following endorsement by its governing body, the Group of Governors and Heads of Supervision (GHOS).…  Read More

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Basel Committee’s Oversight Body Endorses Revisions to Basel III Leverage and Liquidity Standards

Today, the Basel Committee’s oversight body, the Group of Governors and Heads of Supervision (GHOS), endorsed a number of important proposed and final revisions to the Basel III capital and liquidity standards, including:

  • Revisions to the Basel III leverage ratio, which are intended to reflect agreement on a consistent measure of leverage “to overcome differences in national accounting frameworks” and to maintain the leverage ratio as a “backstop” to risk-based capital requirements;
  • Proposed changes to the Basel III net stable funding ratio (NSFR), for which the Basel Committee has released a consultative document;
  • Final Pillar 3 disclosures standards relating to the Basel III liquidity coverage ratio (LCR);
  • Revisions to the Basel III LCR providing that committed liquidity facilities of a type already recognized for jurisdictions with insufficient high-quality liquid assets (HQLAs) may have a role to play within the LCR framework; and
  • The Basel Committee’s strategic priorities for the next two years, which include ongoing monitoring and assessment of Basel III implementation; further examining the Basel framework’s balance between simplicity, comparability and risk sensitivity; and improving effectiveness of supervision.
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Welcome

Welcome to the Davis Polk Capital and Prudential Standards blog. This blog is created by the lawyers in the bank regulatory practice of Davis Polk’s Financial Institutions Group. Its goal is to provide a central resource for the many ongoing regulatory changes that are reshaping bank capital and prudential requirements in the United States and abroad. We expect to post about key developments on an ongoing basis, and will include related Davis Polk memoranda, analysis, visuals, comparisons and other helpful materials whenever available.…  Read More

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Financial Stability Board Proposes Methodologies for Identifying Non-Bank Non-Insurance Global Systemically Important Financial Institutions

Today, the Financial Stability Board (FSB) and the International Organization of Securities Commissions (IOSCO) proposed a set of assessment methodologies for identifying non-bank non-insurance global systemically important financial institutions (NBNI G-SIFIs).  The proposal includes a high-level framework for identifying G-SIFIs and implementation approaches that will apply across all NBNI financial entities.  It also includes NBNI financial sector-specific methodologies for (1) finance companies, (2) market intermediaries (e.g., securities broker-dealers), and (3) investment funds.

Complement Existing Methodologies for Identifying G-SIFIs:  According to the FSB and IOSCO, the proposed assessment methodologies for identifying NBNI G-SIFIs complement the existing methodologies for identifying global systemically important banks (G-SIBs) and global systemically important insurers (G-SIIs). …  Read More

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