Basel 2.5 prompts flurry of asset sales and risk transfer deals

The last months of 2011 saw European banks preparing for the arrival of Basel 2.5 by trying to lighten their risk-weighted assets – but a delay in implementing the same rules in the US has created an uneven playing-field, they complain. Mark Pengelly reports


Europe's banks had little reason to celebrate the striking of midnight on December 31 – the new year means they are now subject to new trading book capital rules, known as Basel 2.5, which will see a big leap in the risk-weighted asset (RWA) numbers for securitisation, structured credit and correlation books in particular. It comes at the worst possible time – just two months after the European Banking Authority announced the continent’s banks would be expected to achieve a 9% Tier I capital-to

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