Regulation
Asia’s Basel III woes
New bank capital rules are bridling Association of Southeast Asian Nations banks with regulations tailored to European and American risk profiles, and may be contributing to a slowdown in growth
Book notes: Banking Reform in Nigeria, by Yomi Makanjuola
A gripping read, starting with Sanusi Lamido Sanusi's leadership of the Central Bank of Nigeria in 2009
FSB unveils final TLAC standard
Global systemically important banks will need to build sizeable stocks of loss-absorbing capacity by 2019; many jurisdictions are lagging behind on implementing resolution framework
European banks ‘lagging behind’ in re-thinking strategies, Bundesbank board member says
European commercial banks have been too slow in adapting to a changed regulatory environment and low interest rates, says Andreas Dombret of the Bundesbank
Regulators push back at complaints of fatigue
EBA chief and secretary-generals of Basel Committee and Iosco defend their work so far and stress the bulk of regulation will be completed in 2016 – though there is more on the horizon
BoE’s Bailey defends dropping reverse burden of proof
PRA chief says decision to backtrack on key element of senior managers regime makes the rules more robust; rejects suggestion he has been ‘cowed by the lawyers’
Research moots greater regulation of US Treasury market
The authors discuss the potential for incentivised or mandated liquidity provision by primary dealers and the introduction of designated market-makers to counter greater instability
Iosco, Asifma officials urge early global co-operation on future rules
Joining forces early on would improve regulatory cohesion between countries, but post-crisis pressure on national rule-makers to legislate poses problems, it is suggested at Hong Kong conference
Hong Kong authorities look to bring shadow banks into resolution regime
Plans for resolution regime are advancing, with legislation expected by the end of the year; unregulated financial institutions can still be covered by the regime
BoE may impose extra liquidity charges, says regulator
BoE will impose Basel III add-ons if banks’ risks are not fully captured by LCR, says prudential policy head
Disharmony threatens EU regulation, says EBA’s Enria
EBA chair says countries have too many opportunities to bend regulations to suit them, undermining supervision and harming banking union; argues EBA should be granted greater responsibilities
EBA raises ‘significant concerns’ over bonus culture at European banks
Bonuses at many banks found to have little correlation with performance in last bonus round before cap; one banker paid over €18 million and largest bonus proportionally was 25 times base salary
US custodians face G-Sib capital hit
Banks warn client funds could be rejected or fees raised to meet new capital demands
EC urged to exempt insurers from central clearing
The need for cash collateral could encourage pro-cyclical investing, industry representatives say
Banks attack proposed risk weights for specialised loans in Europe
EU lenders say both of the EBA’s suggested methods for risk-weighting real estate and other specialised loans would distort regulatory capital
HLA could incentivise systemic activity – Swiss Re
Swiss insurer's head of governmental affairs says crude measures might have unintended consequences for systemic risks
FSB offers China advice on tackling shadow banking risks
Peer review team led by BoE’s Jon Cunliffe recommends establishing an inter-agency group to coordinate surveillance, among other measures designed to reduce shadow banking risks
Managing financial stability, monetary systems and the economic order
If policy-makers fail to address the challenges presented by strong feedback loops between the economic and monetary systems, the next crisis could seriously damage faith in market-based economies
UK regulators spare Co-op Bank £120m fine
Bank of England and FCA ‘censure’ the troubled bank for multiple failures including not being open with regulators, but drop a £120 million fine on financial stability grounds
FSB holds fire on non-bank G-Sifi designation amid backlash
Organisation to delay decision on whether asset managers should be included in designation of systemic ‘non-bank non-insurers’ after consultation attracted widespread criticism
BoE’s Cunliffe warns of risks to loosening ‘regulatory straitjacket’
Regulators may need to ‘fine-tune’ the complex web of rules established since the crisis, but they should not be fooled into thinking the key to growth lies in light-touch regulation
RBNZ proposes measures to boost regulatory efficiency
Consultation following ‘regulatory stocktake’ proposes refinements aimed at cutting unnecessary costs resulting from regulatory expansion in past decade
IMF paper offers advice on Asian financial integration
Authors suggest improvements to the sharing of information, trade integration, capital market development and a common regulatory framework to improve financial integration in Asia
RBI deputy says securitisation market is ‘raring to go’
R Gandhi dismisses concerns that Indian regulation of securitisations is too heavy handed, saying there are plenty of opportunities if firms are willing to seize them