On December 22, 2014, the Basel Committee on Banking Supervision (“Basel Committee”) published consultations on: (i) capital floors and the design of a framework based on standardized approaches; and (ii) revisions to the standardized approach for credit risk. The consultation paper on the capital floor framework design forms part of measures being developed by the Basel Committee to enhance the reliability and comparability of risk-weighted capital ratios. The paper deals with issues including: (i) the scope of aggregation; (ii) adjustments for differences in the treatment of provisions between the standardized and internally modeled approaches for credit risk; and (iii) the choice of the standardized approach. The consultation paper on revisions to the standardized approach for credit risk aims to enhance the existing regulatory capital standard, and proposes revisions to areas including bank exposures and credit risk mitigation. Both consultation periods close on March 27, 2015.
The consultation papers are available at: