Basel III
WHAT IS THIS? Basel III is a set of bank soundness rules drawn up by the Basel Committee on Banking Supervision in response to the financial crisis. It hikes the minimum amount of capital banks must hold, introduces new leverage and liquidity ratios, and limits the use of internal models.
Imminent US shake-up of LCR slated to include discount window
Adding Fed liquidity facility to bank regulation may help overcome stigma, raise lending capacity
BIS’s Hernández de Cos on AI, non-bank risk and tokenisation
General manager talks about how the BIS is navigating a complex global environment
Already under FRTB, some banks hope for modelling reprieve
Risk Live: BMO and UBS opted for SA, but believe regulators could still opt to follow softer US rules
Treasury buyback risks a (collateral) chain reaction
Rebalancing of bond tenors could stretch collateral links to breaking point, argues economist
Europe’s banks can’t agree on how to fix the output floor
Some want market risk excluded, while others push for greater savings from credit modelling
Banks urge Singapore to relax exposure limit on crypto assets
Lower capital for tokenisation and stablecoins welcomed, but cap will curb bank involvement for now
US Basel III will provide reprieve for clearing, but no release
Worst excesses of original endgame proposal avoided, but increased capacity still seen as unlikely
US regulators throw banks a curveball on committed credit lines
New Basel III charge on undrawn facilities will hit largest banks in areas like fund finance and credit cards
Banque de France’s Denis Beau on supervisory reform
Deputy governor speaks about suppression of systemic risk buffer, TLAC floor proposals, and simplifying regulation and resolution
Banks welcome UK IMA eligibility test delay, but some want more
Risk Live: PRA extends monitoring for ‘Spearman’ test, while US regulators drop correlation metric
US regulators cut FRTB’s IMA capital hit by 59%, Isda finds
Trade body pushes for further changes to cross-product netting, default risk charge
US FRTB glitch could spit out negative capital charges
Effort to recognise risk diversification between IMA and standardised approach went too far
Don’t mind the gap risk: regulatory treatment of credit repacks
Gap risk in repackaging is not a credit valuation adjustment for Basel III capital purposes, argues senior quant Andrey Chirikhin
Double, but no trouble? CVA capital hit may lack clout
Industry opinion mixed around Basel III endgame derivatives charge
Erba myth: will US banks choose new capital measure?
B3E gives US banks a dilemma – adopt expanded risk-based approach, or a new standardised alternative
Fed to move tailored-capital goalposts soon, says Bowman
Banks hope agencies will index triggers for harsher capital rules to economic growth
G-Sib capital surcharge: how indexing and averaging alter incentives
Capital risk strategist anticipates Basel III endgame impact on US big-bank behaviour
Un-American or un-JPM? Surcharge rethink divides G-Sibs
Some see sense in rethink to funding indicator, others call for a backtrack
Europe’s next chore: cleaning a floor made messy by the US
Rejection of Basel III’s output floor leaves EU with some difficult decisions to make
G-Sibs face daily data headache from US surcharge proposal
Move to more frequent measurement would be “massively burdensome”, says senior exec
Surcharge of the light-touch brigade
US reform of G-Sib surcharge goes well beyond simple update