Fifty shades of banking regulation might not sound very titillating. Perhaps it should be.
A new Federal Reserve working paper lays bare the degree to which ostensibly black-and-white rules set by the Basel Committee on Banking Supervision differ in their implementation.
At issue is the way in which countries can enforce requirements under Basel bank capital adequacy standards first introduced in 1988 and subsequently updated in 2004 (Basel II) and then overhauled in the aftermath of the financial crisis in 2010 (Basel III). While such rules set a minimum required capital level for banks, countries retain leeway in calculating the ratio by which that level is achieved — allowing for tinkering in the numerator (definition of capital) and the denominator (risk-weighted assets).
Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.
Your access to unlimited Treasury & Risk content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Thought leadership on regulatory changes, economic trends, corporate success stories, and tactical solutions for treasurers, CFOs, risk managers, controllers, and other finance professionals
- Informative weekly newsletter featuring news, analysis, real-world case studies, and other critical content
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the employee benefits and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
