BCBS Consults on Leverage Ratio Treatment of Cleared Derivatives
BCBS is consulting on amendments to the treatment of client cleared derivatives under the Basel III leverage ratio. This consultative document seeks views on whether a targeted and limited revision of the leverage ratio's treatment of client cleared derivatives may be warranted. Comments are requested by January 16, 2019.
BCBS is consulting on whether a targeted and limited revision of the treatment of leverage ratio of client cleared derivatives may be warranted. This proposal is based on the findings of the BCBS review of the impact of the leverage ratio on banks' provision of client clearing services. The proposal also considers the key policy objectives of G20 leaders to prevent excessive leverage and improve the quality and quantity of capital in the banking system and to promote central clearing of standardized derivatives contracts. Stakeholders are invited to provide concrete and robust empirical evidence to support their views. The range of treatments that BCBS may consider include:
- No change to the current treatment
- An amendment to the treatment of client cleared derivatives to allow cash and non-cash initial margin received from a client to offset the potential future exposure of client cleared derivatives
- Alignment of the treatment of client cleared derivatives with the standardized approach for measuring counterparty credit risk exposures (SA-CCR).
The alignment of the treatment of client cleared derivatives with SA-CCR would have the effect of allowing both cash and non-cash forms of initial margin and variation margin received from a client to offset the replacement cost and the potential future exposure amounts of client cleared derivatives. In addition, BCBS is requesting feedback on the merits of introducing a requirement for initial margin to be segregated in order for any amended leverage ratio treatment to apply. Views are also being sought on the forward-looking behavioral dynamics of the client clearing industry that might result from any amended treatment.
Related Links
Comment Due Date: January 16, 2019
Keywords: International, Banking, Client Cleared Derivatives, SA-CCR, CCP, Basel III, Leverage Ratio, BCBS
Previous Article
ESMA Publishes First Statistical Report on Derivatives Markets in EURelated Articles
|
News
PRA Finalizes Reporting Amendments to Pillar 2 Liquidity FrameworkPRA published the final Policy Statement PS13/19 on regulatory reporting amendments and clarifications to the Pillar 2 liquidity framework for banks in UK.
June 17, 2019
WebPage
Regulatory News
|
|
News
IAIS Consults on Revisions to IAIS Supervisory MaterialIAIS has launched a public consultation on revisions to the IAIS supervisory material.
June 14, 2019
WebPage
Regulatory News
|
|
News
IMF Paper on Implementing Prudential Standards in Developing EconomiesIMF published a working paper that provides practical guidance on how developing economies, including non-Basel Committee member countries, could incorporate international standards into their prudential framework.
June 14, 2019
WebPage
Regulatory News
|
|
News
EBA Single Rulebook Q&A: Second Update for June 2019EBA published answers to five questions under the Single Rulebook question and answer (Q&A) updates for this week.
June 14, 2019
WebPage
Regulatory News
|
|
News
FSB Releases Update on Meeting of Regional Consultative Group for AsiaFSB published an update on the meeting of its Regional Consultative Group (RCG) for Asia.
June 14, 2019
WebPage
Regulatory News
|
|
News
BoE, FCA, and MAS Announce Collaboration on Cyber SecurityMAS and UK financial authorities (BoE and FCA) announced that they will work together to strengthen cyber security in their financial sectors.
June 13, 2019
WebPage
Regulatory News
|
|
News
CBIRC Advisory Committee Holds Meeting, Discusses Regulatory IssuesThe first meeting of the International Advisory Committee (IAC) of CBIRC was held in Shanghai from June 11 to 12, 2019.
June 13, 2019
WebPage
Regulatory News
|
|
News
ECB and EIOPA Publish Common Minimum Standards for Data Revision in EUECB and EIOPA published the common minimum standards for supervisory and statistical reporting data by the undertakings in EU.
June 13, 2019
WebPage
Regulatory News
|
|
News
IMF Reports on 2019 Article IV Consultation with Czech RepublicIMF published its staff report and selected issues report under the 2019 Article IV consultation with Czech Republic.
June 13, 2019
WebPage
Regulatory News
|
|
News
APRA Response to Proposal on Revisions to Capital Framework for BanksAPRA published a paper in response to the first round of consultation on proposed changes to the capital framework for authorized deposit-taking institutions.
June 12, 2019
WebPage
Regulatory News
|
