
Tighten oversight and loosen mark-to-market rules, Basel Committee says
In a consultation paper released on November 28, the committee warned banks and supervisors to ensure that valuations were checked by a separate unit within the bank, rather than by the unit responsible for trading the positions, and said that larger risk provisions would be enforced.
But, it added, regulators should also look more closely at relaxing strict mark-to-market rules under certain circumstances, considering whether markets are sufficiently liquid, whether prices are the result of forced sales, and whether the product being valued is sufficiently similar to the product traded in the market. The proposals will be open for comment until February 6.
The committee follows the lead of other regulators and industry bodies which have hinted at loosening of mark-to-market requirements in recent weeks: in October the US Securities and Exchange Commission re-emphasised the rules on ignoring mark-to-market in illiquid markets, and the governments of the eurozone countries made similar recommendations later the same month.
See also: European governments promise loan guarantees and bank restructuring
SEC to ease mark-to-market rules
US banks call for more leeway on mark-to-market rules
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.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
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. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
More on Regulation
Investing in operational readiness to optimise FRTB capital
A forum of industry experts discusses the implementation of FRTB, the burden of investment into data and infrastructure for FRTB compliance, the considerations for banks in using the standardised approach (SA) and the internal model approach (IMA)
SEC cyber rules risk creating web of confusion and costs
Proposals would require breach notifications, public disclosures and annual cyber assessments
Indonesia readies close-out netting after passing P2SK Law
Bankruptcy law changes remove close-out netting obstacles
Behnam comments fan JSCC hopes for US client clearing
Japan clearing exec welcomes CFTC chair’s pledge to keep discussing OTC clearing status for non-US houses
Top 10 operational risks: The umpire strikes back
Tougher regulatory enforcement, new consumer rules and rise of ESG are ringing alarm bells
SVB wouldn’t happen in Europe, says Deutsche CIB head
Campelli also thinks Credit Suisse’s bailed-in AT1 bonds acted as originally intended
How Finma milked Credit Suisse’s CoCos to close UBS deal
An unusual clause in Swiss AT1 bonds allowed them to be written off, but could others follow suit?