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Tighter trading levels for bank tier two in the dollar market could shed light on the future of the equivalent market in Europe. Stand by for spread tightening. -
The ECB’s bank supervision unit has revealed more details about its ‘TRIM’ exercise, which, if successful, could be another nail in the coffin for Basel IV.
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Many are looking for it, but no bank has found it — does the point of non-viability even exist?
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Proponents of “green mortgage loans”, lent against energy efficient homes, argue they are less likely to default and deserve a lower risk weighting than conventional mortgage lending. But it’s a long shot, and there are plenty of other ways to promote the market.
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The skies look dark as you head off for a walk on the beach, so you buy an umbrella. If it turns out sunny, you’ll get a few smirks from people you meet. But you’re unlikely to be abused as an idiot.
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The supply of high quality liquid assets (HQLA) needed for capital regulations is insufficient. This has created an imbalance which, at times, grows so critical it poses a systemic risk. Regulators and the European Central Bank must shoulder responsibility for fixing the problem soon.
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Now there’s a chance that the marginalised and downtrodden voters of rust belt America will get what they really want — a wholesale dismantling of the post-crisis banking regulation — the finance industry must ask itself if that’s what it really wants.
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Disclosing Pillar 2 ‘guidance’ is discretionary and perhaps even discouraged, but banks risk falling foul of speculation if they choose to keep their full supervisory capital demands a secret.
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Of all the strange distortions and economic madnesses introduced by capital rules, operational risk capital tops the table. Rather than simplify it, the new Basel rules should scrap it.
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Holders of newly nationalised PrivatBank’s Eurobonds are pushing back on the National Bank of Ukraine’s plans to bail-in the debt, but the government should not have to take on the liabilities of sophisticated lenders in event of a default. But it does need to be much clearer about its plans.
