The Basel Committee on Banking Supervision is considering reining in some of the proposed alterations to the leverage ratio, which is part of the Basel III rules, sources said. The global regulatory body might allow cash collateral to be used to reduce derivatives exposure and might soften repo treatments, the sources said.
The Basel Committee on Banking Supervision has examined the way 32 major banks assess risk on their balance sheets and found that they all take different views on capital buffers. "The considerable variation observed warrants further attention," Chairman Stefan Ingves said. "Information from this study on the relative positions of banks is being used by national supervisors and banks to take action to improve consistency."
The Basel Committee on Banking Supervision's decision to let banks include equities and residential mortgage-backed securities in Basel III liquidity buffers is gaining plaudits and criticism. Bankers welcome the revision, but experts say it is unlikely to significantly lift a slack securitization market. The change also presents challenges for regulators, experts say.
The Basel Committee on Banking Supervision's decision to give global banks an additional four years to meet liquidity requirements was aimed at ensuring the change wouldn't discourage lending to the real economy. Some banks have already benefited from the revision, with their share prices increasing. However, the move could prove costly for financial institutions, analysts say.
The Basel Committee on Banking Supervision has granted a four-year reprieve and phase-in period for its liquidity-coverage ratio, a step that banks had argued was necessary to sustain lending. Originally, banks were required to have in 2015 sufficient liquid assets to cover expected outflow over 30 days. The date for that has been changed to Jan. 1, 2019, with banks needing to show a 60% ratio in 2015.