The Corner | The Basel committee intends to impose new capital requirements on the banks relating to off-balance sheet assets. The purpose of the international organisation’s move is to mitigate the risk of a bailout of financial products like investment funds and/or securitisations.
UBS | On Thursday the Basel Committee released a consultation on ” Reducing variation in credit risk-weighted assets “. A surprise gift before a long weekend. Our read is that in the pursuit of reducing variability in bank capital backing similar portfolios at different banks, the Committee intends doing away with models for certain books of business and specifying inputs into others.
BBVA Research | A significant review of the prudential treatment of sovereign risk , as a result of which it may lose its privileged status of zero risk weight, has started at a global level. The Basel Committee is already working on this issue, but no formal outcome is expected before the second half of 2016. In Europe, this topic is beginning to gain importance although no measure s are expected in the short term.