Malaysia bank CROs slam Basel capital floor proposal

Basel Committee proposal incentivises risk taking and disincentivises good risk management

john-lee-maybank
John Lee: flaws in the floors

Regulation to introduce a capital floor will encourage banks to take on riskier customers, and water down adherence to sound risk management, according to three chief risk officers (CROs) at major Malaysian banks.

The Basel Committee on Banking Supervision issued a proposal in December 2014 for minimum capital levels to apply to risk-weighted assets (RWAs) using a revised standardised approach to bank capital in order to limit the variability of RWAs across the industry. But the measures were

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