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Progress on post-crisis reforms: banking supervisors and central bankers meet to discuss

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Autor: Bancherul.ro
2014-09-28 15:50

Banking supervisors and central bankers representing more than 100 jurisdictions met this week in Tianjin, China, to discuss a range of policy measures relating to the Basel Committee on Banking Supervision's post-crisis reform agenda. Participants also discussed the role of banking systems in promoting growth and making financial services safe so that they could support the real economy.

Hosted by the China Banking Regulatory Commission, the event included a meeting of the Basel Committee and the 18th International Conference of Banking Supervisors. The occasion marked the expansion of the Basel Committee's membership to include the European Central Bank's Single Supervisory Mechanism and Indonesia's Financial Services Authority. To facilitate broad and consistent implementation of the Basel Committee's standards and foster a deeper understanding of supervisory practices worldwide, representatives from Chile, Malaysia and the United Arab Emirates have also joined the Committee as observers.

Dealing with global systemically important banks

The Basel Committee also reviewed an updated list of global systemically important banks (G-SIBs) based on end-2013 data. A bank designated as a G-SIB based on the Committee's methodology for assessing global systemic importance is required to hold additional Common Equity Tier 1 (CET1) capital of between 
1% and 2.5%. The Committee and the Financial Stability Board will publish the list of G-SIBs in the coming weeks. This higher loss absorbency requirement will be phased in from the start of 2016, and will be fully implemented from the start of 2019.

Endorsement of the net stable funding ratio

The Committee endorsed the final details of Basel III's net stable funding ratio (NSFR). The NSFR limits the extent to which illiquid assets can be funded by volatile short-term borrowings and encourages banks to maintain more stable and longer-term sources of funding. The final standard will be released in the coming weeks and will take effect at the start of 2018.

Revising corporate governance guidance

Effective corporate governance is critical to the proper functioning of the banking sector. The Basel Committee has revised its 2010 Principles for enhancing corporate governance and will soon publish revisions for consultation.

Finalising securitisation standards

The Committee also reviewed progress towards finalising revisions to the Basel framework's securitisation standard and agreed the remaining significant policy details that will be published by year-end. It also recognised work that is being conducted jointly by the Basel Committee and the International Organization of Securities Commissions (IOSCO) to review securitisation markets. The Committee looks forward to the development of criteria that could help identify - and assist the financial industry's development of - simple and transparent securitisation structures. In 2015, the Committee will consider how to incorporate the criteria, once finalised, into the securitisation capital framework.

Improving consistency in bank capital ratios

The Committee has been closely examining banks' risk weighting practices. At its meeting, the Committee discussed a range of policy and supervisory actions that it has initiated to address the issue of excessive variability of risk-weighted assets. These actions include a review of the standardised approaches (ie the non-internal model-based approaches), the introduction of capital floors, greater restrictions on modelling parameters and assumptions, and improved disclosure. The Committee will elaborate on these measures in its report to the November 2014 G20 Summit.

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