Featured Product

    BCBS Survey Examines Challenges Banks Face in Implementing Basel III

    March 14, 2019

    BCBS published a working paper that presents results of the third-wave survey conducted by the Research Task Force on the role of multiple regulatory constraints in the Basel III framework. The questions test the impact of a regulatory instrument and provides an indication of the interaction among the said instruments and the problems created by the growing complexity of the Basel III framework.

    The report analyzes data provided by 86 Group 1 banks (banks that have tier 1 capital of more than EUR 3 billion and are internationally active) and 42 Group 2 banks (all other banks that submitted the survey). To provide additional insights (and check data quality), answers of banks from this survey are being merged with the bank information, on other topics, collected through the Basel III monitoring exercise. The report first summarizes the objectives and the structure of the survey, provides an overview of the sample used, and presents an in-depth analysis of the impact of regulatory instruments covered in the survey. The survey covers banks' management of tier 1 capital; management of leverage ratio; allocation of risk exposure across various lines of business; behavioral reactions to stress test results, liquidity coverage ratio (LCR), and net stable funding ratio (NSFR); and the most important challenges associated with meeting regulatory requirements.

    The survey results show that most banks are confident in their capital positions and can manage regulatory complexity. There is substantial variation in the regulatory requirement that banks report as hardest to meet. The tier 1 capital ratio is the most challenging for 35% of banks, the NSFR for 15%, total loss-absorbing capacity (TLAC) for 12%, the leverage ratio for 11%, and the LCR for 6% of banks. To adjust to the LCR, banks primarily increase holdings of high-quality liquid assets (HQLA). In contrast, to adjust to the NSFR, banks primarily issue more long-term debt. The analysis reveals that the most important determinants of target management tier 1 buffers are financial market conditions and regulatory constraints. Banks indicated that the complexity of the Basel framework is the most difficult challenge associated with meeting regulatory requirements. Uncertainty with respect to implementation and/or changes to regulation were also reported as important.

     

    Related Links

    Keywords: International, Banking, Basel III, Regulatory Instruments, Basel III Monitoring, LCR, NSFR, Tier 1 Capital, Survey Results, BCBS

    Featured Experts
    Related Articles
    News

    EBA Updates Filing Rules for Supervisory Reporting

    The European Banking Authority (EBA) published version 5.1 of the filing rules for supervisory reporting.

    October 19, 2021 WebPage Regulatory News
    News

    ECB Amends Guideline on Procedures for Collection of AnaCredit Data

    The European Central Bank (ECB) Guideline 2021/1829 on the procedures for the collection of granular credit and credit risk data has been published in the Official Journal of European Union.

    October 19, 2021 WebPage Regulatory News
    News

    ECB Amends Guideline on Procedures for Collection of AnaCredit Data

    The European Central Bank (ECB) Guideline 2021/1829 on the procedures for the collection of granular credit and credit risk data has been published in the Official Journal of European Union.

    October 19, 2021 WebPage Regulatory News
    News

    EBA Publishes Standards on Disclosure of Investment Policy Under IFR

    The European Banking Authority (EBA) published the final draft regulatory technical standards on disclosure of investment policy by investment firms, under the Investment Firms Regulation (IFR).

    October 19, 2021 WebPage Regulatory News
    News

    APRA Finalizes Guidance for New Prudential Standard on Remuneration

    The Australian Prudential Regulation Authority (APRA) published the prudential practice guide CPG 511 to assist banks, insurers, and superannuation licensees in meeting requirements of CPS 511, the new prudential standard on remuneration.

    October 18, 2021 WebPage Regulatory News
    News

    OCC Updated LIBOR Self-Assessment Tool for Banks

    The Office of the Comptroller of the Currency (OCC) published a bulletin that provides an updated self-assessment tool for banks to evaluate their preparedness for cessation of the London Interbank Offered Rate (LIBOR).

    October 18, 2021 WebPage Regulatory News
    News

    TCFD Updates Guidance for Financial Disclosures on Climate Risk

    The Financial Stability Board (FSB) published a report that examines the progress made toward disclosures aligned with recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).

    October 14, 2021 WebPage Regulatory News
    News

    BCBS Report Examines Progress on Adoption of Basel III Framework

    The Basel Committee on Banking Supervision (BCBS) published the progress report on adoption of the Basel III regulatory framework in member jurisdictions.

    October 14, 2021 WebPage Regulatory News
    News

    ACPR Implements Updates Related to DPM Version 3.1

    The French Prudential Supervisory Authority (ACPR) has implemented, in its information system, updates linked to the Data Point Model (DPM) version 3.1.

    October 14, 2021 WebPage Regulatory News
    News

    EBA Note Examines Transition Risks of Benchmark Rates

    The European Banking Authority (EBA) published a thematic note that aims to identify and raise awareness of the transition risks of benchmark rates, as the London Interbank Offered Rate (LIBOR) and the Euro Overnight Index Average (EONIA) are close to being phased out.

    October 14, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7571