European banks face forex volatility on bail-in ratios

Use of funding in foreign currencies creates new risk, especially in non-eurozone countries

euro-dollar-pound.jpg

European banks raising bail-in debt under new European Union rules are struggling to find fixes for the potential foreign exchange volatility that could arise when funding and risk-weighted assets are denominated in different currencies. The problem is especially acute for banks whose domestic currency funding market – such as Poland, Sweden or the UK – is not as deep as the eurozone or dollar markets.

“The forex volatility issue is a pain,” says Julie Galbo, chief risk officer at Nordea in

To continue reading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an indvidual account here: