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Home Archive for category "Proposals" (Page 2)
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Overview of European Commission’s Proposal on Reporting and Transparency of Securities Financing Transactions (SFTs)

Alongside its proposed EU banking sector structural reforms, the European Commission (EC) has issued a proposal regarding the reporting and transparency of securities financing transactions (SFTs).  This blog post provides a high-level overview of certain aspects of the EC’s SFT proposal.

EC’s Stated Rationale for the SFT Proposal:  The EC stated that “[t]o prevent banks from shifting parts of their activity to the less-regulated shadow banking sector, it is important that any structural separation measure [such as the EC’s proposed banking sector structural reforms] is accompanied by measures improving the transparency of shadow banking.”  According to the EC, transparency helps ensure that authorities and market participants have an appropriate understanding of how the markets work and the magnitude and nature of any potential risks. …  Read More

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Risk Governance: Visual Memorandum on Guidelines Proposed by the OCC

The OCC has proposed a set of enforceable and specific risk governance guidelines to formalize its heightened expectations for large national banks and federal savings associations. The risk governance guidelines would 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.

State banks that are not subject to the OCC’s proposed 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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Basel III Net Stable Funding Ratio (NSFR) – High-Level Comparison Tables

[Detailed client memorandum to come.]  We have prepared a set of tables that provide a high-level comparison of the available stable funding (ASF) factors and the required stable funding (RSF) factors used to calculate the Basel III net stable funding ratio (NSFR).  The tables compare the Basel Committee’s January 2014 proposed revisions to the NSFR with the original December 2010 version of the NSFR.  We will be publishing a client memorandum that analyzes the key proposed changes to the Basel III NSFR.…  Read More

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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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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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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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