DNB Publishes Multiple Regulatory Updates for Banks

Additionally, DNB and 24 other national central banks and financial supervisory authorities in the European Union issued a letter to the European Commission (EC) for full, consistent, and timely implementation of the Basel III accord. The letter notes that EC is  preparing a legislative proposal to implement the final parts of the globally agreed Basel III framework for banks. It further highlights that it is in the long-term interests of the European Union to implement the globally agreed standards, including all aspects of the Basel III agreement. This has three important implications:

• The output floor should be implemented as agreed in Basel, with all risk-based capital measures and buffers calculated on the basis of one single set of risk-weighted assets. This has several benefits. It is simple and transparent, reduces the variability of risk-weighted assets, and builds confidence in banks’ capital structures. It also improves the level playing field between banks using internal models and banks using standardized models, as well as between different banks using internal models worldwide. A parallel stack approach to the output floor does not attain these benefits and therefore should not be pursued. 
• The new standardized approach for credit risk should be implemented as agreed globally. This new approach is more risk-sensitive than the old one and it entails a delicate balance between the risks in different exposure types.
• European Union should refrain from making further exemptions from Basel III or from making the banking regulatory framework more complex. Deviations specific to the European Union should be minimized and the existing deviations from Basel should be re-assessed. 

Related Links

• Update on Additional Data Requests
• Overview of Additional Data Requests (PDF)
• Notification on MREL-TLAC Reporting
• Reporting Templates and Filing Indicators (XLSX)
• Notification on Implementation of Basel III
• Joint Letter to EC (PDF)

Keywords: Europe, Netherlands, Banking, Reporting, Basel, Regulatory Capital, DLR, MREL, TLAC, Credit Risk, Standardized Approach, Output Floor, EBA, DNB, EC