These accords are a global regulatory standard on bank minimum capital requirements, bank liquidity, and bank leverage.
FORBES: Basel Barriers: How capital requirements would impede progress in the sovereign debt crisis
It will suggest incorporating a leverage ratio into bank-capital requirements, to supplement the existing risk-weighting of assets.
Since, for Korean banks, they are risk-free sovereign assets, the bonds are used to meet the bank's capital requirements and they are often held until maturity.
This risk is mitigated by the current moderate level of nonperforming loans (1.1% of total lending), larger provisions for bad loans, and more stringent bank capital-adequacy requirements in recent years.
In a press release today the regulator detailed capital and liquidity requirements of large bank holding companies and systemically important non-bank financial firms.
The Fed would also take on a consultative role in regulating Fannie and Freddie, giving the central bank authority to assist in setting the companies' capital requirements.
The banks have been hit hard by losses on their sovereign debt holdings and bank deleveraging has also been the result of substantial capital requirements and new regulations.
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Moynihan assured investors that the bank would not have to raise capital from investors to meet new requirements.
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Keith Bowman, equity analyst at Hargreaves Lansdown, said that while Barclays faced "a series of legacy issues" such as Libor, and increased regulatory and capital requirements, things were looking up for the bank.
The three main regulators' committees at the bank on banking supervision, payments and settlements, and foreign-exchange have done important work establishing the minimum capital requirements for banks, drafting international principles for bank supervisors and writing a voluntary code of disclosure for banks' derivatives exposures.
As a bank it faces more intrusive supervision from the Federal Reserve, tougher capital requirements and restrictions on investing.
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She said that developing countries needed to respond by beefing up bank supervision, restricting credit to fast-growing areas, imposing capital requirements that changed with the economic cycle and monitoring their foreign exchange exposures.
However, higher capital requirements could hamper the growth of available funds from the bank.
This rule (which went into effect near the 2007 market top and was suspended near the 2009 bottom) vastly magnified subprime mortgage weakness, effectively forcing banks into near self-perpetuating rounds of asset writedowns, putting pressure on bank balance sheets until they had to sell more liquid assets to meet capital requirements.
For now Moynihan is clearly banking on cost-saving measures associated with mass layoffs to help convince stock market investors that Bank of America is headed in the right direction and can deal with the current low-interest rate environment, mortgage-related legacy issues and new international banking capital requirements that Moynihan said were the biggest challenges facing his bank.
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Higher international capital and liquidity requirements, plus the government's decision to put the Bank of England back in charge of regulating banks, are this government's attempt to have the benefits of free financial markets without the accompanying disasters.
High reserve requirements, which force banks to park much of their capital with the Central Bank, helped too.
Bank lobby groups will try to water down the consumer agency's powers and to persuade lawmakers that higher capital requirements will curb lending to hard-working Americans (and put the industry at a disadvantage to international rivals).
The additional capital requirements in combination with enhanced risk management standards, in theory should lead to reduced risk of bank failures, and should decrease the interdependence between financial institutions, effectively reducing the risk of future banking crises.
FORBES: Basel Barriers: How capital requirements would impede progress in the sovereign debt crisis
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