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Basel III News, May 2011
Basel III News, May 2011
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Basel iii News, May 2011 (6858 words, 30 pages in Adobe Acrobat format) from the Basel iii Compliance Professionals Association (BiiiCPA) - Web: http://www.basel-iii-association.com
According to Otto von Bismarck, laws are like sausages, it is better not to see them being made.
But this is not an option for us. Basel II / III professionals must try hard to understand both, the letter and the spirit of the law.
Banks continue to lobby for revisions of the key factors that are included in the Basel III liquidity ratios, in an effort to minimize the consequences and... increase shareholder value (and of course pay dividends).
Citigroup and Goldman Sachs for example, try to persuade that the NSFR should be substantially re-calibrated.
Are you ready for the bad news? According to Moody’s senior vice president Alain Laurin: “While directionally positive, Basel 3 does not cure the structural challenges banks continue to face from a credit perspective, such as illiquidity and high leverage, nor does it alleviate the tension between profit-maximizing equity holders and bank managers in contrast to risk-averse bondholders.”
This month we had another opportunity to see that Basel III is a minimum standard:
The finance commission members in Switserland voted in favor of the government's proposal, which would make the UBS and Credit Suisse hold equity Tier 1 capital of at least 10 percent, 3 percentage points more
than required by new Basel III rules.
Credit Suisse puts on a brave face and considers the proposal "tough but doable".
UBS, more practical, calls for a year's delay to allow more clarity on international regulation.
According to Otto von Bismarck, laws are like sausages, it is better not to see them being made.
But this is not an option for us. Basel II / III professionals must try hard to understand both, the letter and the spirit of the law.
Banks continue to lobby for revisions of the key factors that are included in the Basel III liquidity ratios, in an effort to minimize the consequences and... increase shareholder value (and of course pay dividends).
Citigroup and Goldman Sachs for example, try to persuade that the NSFR should be substantially re-calibrated.
Are you ready for the bad news? According to Moody’s senior vice president Alain Laurin: “While directionally positive, Basel 3 does not cure the structural challenges banks continue to face from a credit perspective, such as illiquidity and high leverage, nor does it alleviate the tension between profit-maximizing equity holders and bank managers in contrast to risk-averse bondholders.”
This month we had another opportunity to see that Basel III is a minimum standard:
The finance commission members in Switserland voted in favor of the government's proposal, which would make the UBS and Credit Suisse hold equity Tier 1 capital of at least 10 percent, 3 percentage points more
than required by new Basel III rules.
Credit Suisse puts on a brave face and considers the proposal "tough but doable".
UBS, more practical, calls for a year's delay to allow more clarity on international regulation.
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