Capital
Basel capital floors are necessary – Riksbank’s af Jochnick
Internal models have led to doubts over true capital adequacy, Riksbank deputy says, so floors have an important role to play
Basel set to decide on capital relief for accounting changes
Phase-in to IFRS 9 and Cecl needed to avert "a dramatic overnight drop in regulatory capital", say auditors
Basel III completion date pushed back
Governors and heads of supervision to delay meeting that would have given final approval to Basel III, as disagreement continues on output floors
Task force launches climate disclosure recommendations
Mark Carney says better information will allow investors to “back their convictions with their capital”; Mary Schapiro says businesses will take the lead, even if politicians will not
BIS paper identifies spillovers from targeted macro-prudential policies
Applying tools narrowly to a sector may nevertheless affect other sections of the financial system, authors find
Should banks hold cocos or other kinds of buffers?
Richard Heckinger examines the merits of contingent convertible bonds vs other instruments for meeting regulatory requirements
Armenia saw turbulent H1 2016 – financial stability report
Geopolitical risks and growth slowdown led to a difficult environment for banks, although they still managed to boost capital and liquidity
Financial globalisation only good within limits, says Canada’s Lane
Timothy Lane flags the dangers of an open capital account for some countries, saying monetary policy in some countries may be “overwhelmed”
Market forces drive deleveraging as well as regulation – Caruana
BIS chief says markets are forcing discipline on banks, although he concedes regulation is playing a role as well; discussion participants point to tensions in regulatory framework
BoE sets final rules for bank loss-absorbency
Final rules for bail-inable debt adjusted for longer transition and lighter load on smaller banks
Vickers renews criticism of BoE systemic buffer
Blanket 3% buffer would better support ring-fencing, Vickers tells Tyrie
EBA recommends tighter regulation of European banks’ ‘large exposures’
Report calls for stricter limits on bank exposure to single clients and cautions against premature application of “standardised approach” to large exposures
European Commissioner cautions US on TLAC rules
Dombrovskis says foreign banks should not be mistreated by Fed internal TLAC proposal
BIS research tests leverage ratio with adjusted DSGE model
Authors design a model with both leverage ratio and variable risk-weighted capital requirements, finding a range of benefits to constraining leverage
Carney: green finance could help reverse long-run rate decline
Bank of England governor says green finance has the potential to send capital where it is most needed, and help advanced economies escape the problem of falling equilibrium interest rates
Stress tests should consider wider range of resilience metrics – BoE article
Metrics including liquidity and funding resilience should be considered as stress tests become an important part of a central bank’s regulatory toolkit; current liquidity and funding stress scenarios are “less advanced”
Post-crisis banking regulations increase large firms’ funding advantage – paper
Banque de France working paper presents a large-scale DGSE model with large and small firms to analyse the impact of new banking regulations
BIS paper flags spillovers from bank dividends
Dividend payments create a channel through which one bank’s capital policy can affect the equity value and risk of default of others, giving capital the attributes of a public good
Basel Committee hits turbulence on approach to year-end deadline
Central banks and supervisors offer support to its year-end goal, but industry players and EU countries show growing concern over higher capital levels
Fed finalises rules for countercyclical capital buffer
US central bank promises it will only adjust the buffer gradually and will seek comment before doing so, after consultation flagged concerns
Proposal for calculating capital requirements for concentration risk
Working paper warns “inadequate reflection” on concentration risk can lead to banks holding too little capital; proposes technique for calculating appropriate levels
EBA proposes new templates for AT1 issues
EBA releases draft templates for future issuance of Additional Tier 1 capital instruments, highlighting provisions it ‘would recommend avoiding’
IMF staff propose additional reforms to Italian banking sector
Directors at the fund “commend” the Italian authorities for reforms so far, while staff suggest a range of additional measures to tackle issues around resolution and NPLs
Basel Committee scales back risk weights in revised securitisation standard
Tighter definition of what counts as a “simple, transparent and comparable” securitisation gives room to allow “modest” reduction in capital requirements, committee says