Basel II helping to improve German banking, says S&P
The proposed Basel II bank safety rules, weak operating performance and shareholder value considerations are behind a trend to more efficient capital allocation, prudent cost control and risk-adjusted pricing in German banking, a leading credit rating agency said today.
S&P said in a report on the German banking system that it expects continued weak performance in the system next year, based on modest economic growth prospects and severely depressed unrealised reserves in bank financial investments.
But S&P said it is confident there are no immediate threats to the overall liquidity and solvency of the German banking system as a whole.
The Basel Committee on Banking Supervision, the body that effectively regulates international banking, wants to apply the complex Basel II accord to the large international banks of the world’s leading economies from late 2006. The risk-based capital adequacy accord is designed to guard banks against unexpected losses from banking risks, including credit, market and operational risks.
The European Commission plans to apply Basel II via a new capital adequacy directive to all banks and investment firms in the EU, of which Germany is a member state, from the same date.
Last month, credit rating agency Moody’s Investors Service also cited Basel II as a factor encouraging German banks to improve their risk management practices. Moody’s said it believed a renewed focus on profitability and strategic issues in the German banking industry meant the country’s banks would not undergo a systemic crisis.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Regulation
Why there is no fence in effective regulatory relationships
A chief risk officer and former bank supervisor says regulators and regulated are on the same side
Snap! Derivatives reports decouple after Emir Refit shake-up
Counterparties find new rules have led to worse data quality, threatening regulators’ oversight of systemic risk
Critics warn against softening risk transfer rules for insurers
Proposal to cut capital for unfunded protection of loan books would create systemic risk, investors say
Barr defends easing of Basel III endgame proposal
Fed’s top regulator says he will stay and finish the package, is comfortable with capital impact
Bank of England to review UK clearing rules
Broader collateral set and greater margin transparency could be adopted from Emir 3.0, but not active accounts requirement
The wisdom of Oz? Why Australia is phasing out AT1s
Analysts think Australian banks will transition smoothly, but other countries unlikely to follow
EU trade repository matching disrupted by Emir overhaul
Some say problem affecting derivatives reporting has been resolved, but others find it persists
Barclays and HSBC opt for FRTB internal models
However, UK pair unlikely to chase approval in time for Basel III go-live in January 2026