Big banks such as Barclays, HSBC and Royal Bank of Scotland could be required to hold more capital than smaller firms if the British authorities deem to pose more risky to the country's financial system. According to a senior source with knowledge of the talks, systemically important banks could be ordered to hold up to 4pc more core Tier 1 capital than other banks under the new Basel III rules that are set to be finalised in Switzerland on Sunday, at a meeting of top central bankers and regulators from across the world. The additional charge, could mean that some large and particularly important banks will be required in extreme cases to maintain a Tier 1 capital ratio of as much as 13pc, more than treble the minimum required by current rules. What charge to impose will be at the discretion of local regulators and will be on a sliding scale of between nothing and 4pc, although in practice it is likely to be set at between 2pc and 4pc, with credit given to banks that are able to demonstrate that they have advanced plans in place should problems arise, such as a so-called 'living will' arrangement. The new capital charge for big banks will come in addition to what are expected to be significant increases in the main capital ratios required of banks. The core Tier 1 ratio, the first loss buffer, is expected to be more than doubled with predictions it could be set as high as 6pc, while banks are also likely to be hit with a new 3pc counter-cyclical capital buffer. Credit default swaps (CDS) on bank debt have increased in recent days as markets prepare for the increase in capital ratios, which will force banks to go out and raise more money on the markets. The cost of insuring the debt of all of the UK's major banks has risen, with CDS on Barclays rising by just under 7 basis points to 124bp, meaning that to insure £1m of the bank's debt would cost an additional £7,000. The Group of Governors and Heads of Supervision, the supervisory body of the Basel Committee for Banking Supervision, will finalise the rules agreed by the committee, which will then be sent to the November G20 ministers meeting in Seoul for final approval. The actual implementation of the rules will take place over several years, so as to avoid a situation in which banks are all forced to go to the international capital markets at the same time to raise the new money they require to reach the new capital ratios. It is even possible that some banks will actually be able to cut the amount of capital they hold, which would lead to well needed release of new capacity back into the lending markets.Wait till after April 2009 when the I.F.R.S. comes into effect for BACK ON BALANCE SHEETS FOR NATION STATES...(CAREFUL GORDON BROWN..PFIs'; pensions;)
Basel II Accord.conflicts caused by the Basel system of banking regulations, which determine how much capital banks must raise.
Wait till after April 2009 when the I.F.R.S. comes into effect for BACK ON BALANCE SHEETS FOR NATION STATES...
(CAREFUL GORDON BROWN..PFIs'; pensions;)
Then you'll see Devaluation....Mark it; Mark it; Mark it.
Prof. Peter Spencer, of the Ernst & Young Item Club, regarded as "one of Britain's leading economists".
It was then that a report of his views said:…conflicts caused by the Basel system of banking regulations, which determine how much capital banks must to keep their books in order, are the root cause of the crunch and were serving to worsen the City's plight.
The regulations meant that banks forced to take off-balance sheet assets from troubled structured investment vehicles on to their books had little choice but either to raise money from abroad or cut back dramatically on their spending, he said.
He warned that, if London's money markets remained frozen and the authorities retain the strict Basel regulations, the full scale of the eventual credit crunch and economic slump could be "disastrous"...........
Basel rules to hit 'too big to fail' banks harder
'Too Big To Fail' banks will be subject to harsher capital requirements than their
less systemically important peers under the new rules on capital ratios set to be
agreed this weekend.
Apr 18, 2009
When they managed to sidestep the first Basel Accord, a second set of rules was imposed known as Basel II. The new rules were established in 2004, but they were not levied on U.S. banks until November 2007, the month after the Dow ...
Apr 23, 2009
Thursday, 11 December 2008Wait till after April 2009 when the IFRS comes into effect for BACK ON BALANCE SHEETS FOR NATION STATES...(CAREFUL GORDON BROWN..pfis'; pensions;)Basel II Accord.conflicts caused by the Basel system of.
May 16, 2009
... first is new approaches to the regulation of the capital adequacy of banks. These have of course been extensively revised by the introduction of Basel 2, which has aimed to achieve greater sensitivity of capital levels to the.
Dec 11, 2009
they being MSM AND THE TOTAL POLITICOS.see end of this article.The government ignores the crisis, the people are not fully awake to it and people like UKIP are quite prepared to wreck the country in pursuit of their 'one-track-minds' ...
1
2
3
4
5
6
Posts
