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Last week, the Basel Committee on Banking Supervision announced plans to oversee how each country implements the new capital standards. But such a step may signal problems before the final rules are even adopted.
September 30 -
International regulators have agreed to keep a proposed capital surcharge on the world's most systemically important firms despite concern among institutions that the extra fee will be excessive and crimp lending.
September 28 -
Bankers, directly and through their lobbyists, have been expressing outrage related to the Basel III rules designed to ensure the safety and soundness of the global banking system. A top spokesman at the American Bankers Association, for example, was recently quoted saying that Basel III should be "put on a shelf."
September 27 -
While bankers complain about what's already on the books, regulators are moving on to write new "macro-prudential" rules designed to curb systemic risk.
September 26
WASHINGTON — The Financial Stability Board proposed several policies Monday for lowering the risk giant firms pose to the system, including principles for resolution regimes, ahead of next month's Group of 20 summit in France.
The board agreed on "key attributes" countries should include in systems for resolving failing too-big-to-fail firms. The FSB also recommended countries adopt resolution-planning requirements, higher capital cushions and additional supervision for systemically important firms. The proposals will be submitted for approval by leaders of the G-20 nations at their summit in Cannes.
The measures would create an "international standard" for resolution regimes, the board said. Regulators agreed that a country's resolution regime should ensure that failing institutions are resolved safely and without risk to its taxpayers.
Each global systemically important financial institution should have to draft a recovery and resolution plan, members said. Reflecting new international capital requirements issued by the Basel Committee on Banking Supervision, giant firms should also face higher capital requirements than smaller firms. New Basel standards call for assessing a capital "surcharge" on SIFIs.
Separately, the FSB said it will regularly review nations' supervision of the shadow banking system to determine if oversight should be strengthened. The board will review regulation of shadow banking in five areas: money market funds; other shadow banking entities; securitization; securities lending and repurchase agreements; and banks' interaction with shadow banking entities.
The board also approved its second report on reforms for the over-the-counter derivatives market, which will be published shortly, and reiterated its commitment to overseeing how each country implements the "Basel III" capital reforms.
Finally, members called for greater progress in regulators lessening their reliance on credit rating agencies and agreed to study the issue further.
