Featured Product

    François Galhau on Banking Risks, Regulations, and Supervision

    June 28, 2017

    BIS published a speech by François Villeroy de Galhau, the Governor of the Bank of France and Chairman of the ACPR. While speaking at the ACPR conference in Paris, he focused on issues related to banking risks, regulations, and supervision post the global financial crisis that happened nearly a decade ago.

    He said that the banking and financial system is substantially more resilient now than it was ten years ago. He added that considering the cost of the financial crisis (based on the IMF data), the potential cost of financial regulation is very small. "For banks, the priority is to stabilize the regulatory framework and, therefore, we must finalize Basel III." He also said that, " I must stress that our goal is to finalize Basel III, based on improved models that remain risk-sensitive, and not to move onto Basel IV, which would use the standardized approach." Additionally, an agreement must be reached on a lower output floor, along with a tightening of controls over the banks' internal models. This is quite similar to the targeted review of internal models (TRIM) that was approved for the Single Supervisory Mechanism and "the results of which we are more than willing to submit to peer-review." This stance is shared by the EC and other European countries, such as Germany and the Netherlands.

     

    He also stressed the need to avoid regulatory arbitrage. For non-bank players, significant progress is required on liquidity management by funds and asset management companies. Fintechs and the major digital platforms that conduct financial activities will also have to comply with similar regulations sooner or later, said Mr. Galhau. He acknowledged the value of EC proposals on central counterparties (CCPs) "to insist that those CCPs whose activities are 'super-systemic' for the EU market establish themselves in the European Union. They are a step in the right direction." They represent the only viable mechanism to guarantee that European authorities and national central banks can control and manage the risks that CCPs are likely to pose to the financial stability of the EU. Once the provisions on the resolution of CCPs have been finalized, the compensation framework within the EU will have been improved considerably. He concluded by saying that Europe, including Germany and France, now has a special duty to protect financial regulation—a regulation that is sensitive to risk, balanced in its treatment of banks and non-banks, and binds the entire international community.

     

    Related Link: Speech

    Keywords: International, BIS, ACPR, Europe, Banking, Banking Supervision, Basel III

    Featured Experts
    Related Articles
    News

    HKMA on Fintech Adoption and Innovation by Banks in Hong Kong

    HKMA announced the publication of a report on fintech adoption and innovation in the banking industry in Hong Kong.

    May 20, 2020 WebPage Regulatory News
    News

    BIS on Impact of Increasing Use of Cloud Technology on Cyber Risk

    BIS published a working paper that examines the drivers of cyber risk, especially in context of the cloud services.

    May 20, 2020 WebPage Regulatory News
    News

    ECB Consults on Guide for Managing Climate and Environmental Risks

    ECB launched consultation on a guide specifying how the Banking Supervision expects banks to consider climate-related and environmental risks in their governance and risk management frameworks and when formulating and implementing their business strategy.

    May 20, 2020 WebPage Regulatory News
    News

    ECB Issues Opinion on Revisions to CRR in Response to COVID Crisis

    ECB published an opinion (CON/2020/16) on amendments to the prudential framework in EU in response to the COVID-19 pandemic.

    May 20, 2020 WebPage Regulatory News
    News

    EBA Assesses Interlinkages Between Recovery and Resolution Planning

    EBA published a report that examines the interlinkages between recovery and resolution planning under the Bank Recovery and Resolution Directive (BRRD).

    May 20, 2020 WebPage Regulatory News
    News

    SRB Publishes Final MREL Policy Under the Banking Package

    SRB published the final Minimum Requirements for Own Funds and Eligible Liabilities (MREL) policy under the Banking Package.

    May 20, 2020 WebPage Regulatory News
    News

    US Agencies Amend Interim Final Rule on Transition Period for CECL

    US Agencies (FDIC, FED, and OCC) published a final rule that makes technical changes to the March 31, 2020 interim final rule that provides a five-year transition period for the impact of the current expected credit loss (CECL) methodology on regulatory capital.

    May 19, 2020 WebPage Regulatory News
    News

    ECB Releases Results of March Survey on Credit Terms and Conditions

    ECB published results of the March 2020 survey on credit terms and conditions in euro-denominated securities financing and over-the-counter (OTC) derivatives markets.

    May 19, 2020 WebPage Regulatory News
    News

    FINMA Adjusts Deadlines for COVID-19 Relief Measures for Banks

    FINMA published guidance (06/2020) on extending or discontinuing various exemptions that were granted due to the COVID-19 crisis.

    May 19, 2020 WebPage Regulatory News
    News

    SRB Consults on Standardized Data Set for Bank Valuation in Resolution

    SRB launched a consultation on the minimum data needed for valuation of a bank in resolution.

    May 19, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 5203