Basel III leverage ratio guidance. The Basel Committee on Banking Supervision published guidance in the form of frequently asked questions and answers regarding the “Basel III leverage ratio framework and disclosure requirements.” (7/7/2015) BIS press release.
FSB launches shadow bank peer review. The Financial Stability Board (FSB) launched a peer review on the implementation of its policy framework for financial stability risks posed by non-bank financial entities other than money market funds (“other shadow banking entities”). The objective of the review is to evaluate the progress made by FSB jurisdictions in implementing the overarching principles set out in the framework, in particular, to assess shadow banking entities based on economic functions, to adopt policy tools if necessary to mitigate any identified financial stability risks, and to participate in the FSB information-sharing process. Comments should be submitted by July 24, 2015. (7/2/2015) FSB press release.
Basel Committee reports on the impact of banking supervision. The Basel Committee on Banking Supervision published its “Report on the impact and accountability of banking supervision.” The report is a range-of-practice study on how supervisors around the world define and evaluate the impact of their policies and actions, manage against that impact and then account for it to their external stakeholders, including the government, parliament and the general public. The report shows that in recent years, supervisors have revised and strengthened their strategy and practices. Supervision has become more comprehensive and intrusive, and takes into account additional dimensions of a bank’s business. Supervisors have also taken steps to gain more insight into the impact of their activities. (7/2/2015) BIS press release.
Basel Committee consults on credit valuation adjustment risk. The Basel Committee on Banking Supervision issued a consultative paper on its “Review of the Credit Valuation Adjustment Risk Framework.” While the Basel III framework sets out a treatment of credit valuation adjustment risk (CVA), it does not take into account the variability arising from daily changes in market risk factors (account exposure variability). The consultative paper envisages a CVA risk framework that considers the market risk exposure component of CVA along with its associated hedges. Comments should be submitted by October 1, 2015. (7/1/2015) BIS press release.
IOSCO project on non-traditional credit rating agency products. The International Organization of Securities Commissions (IOSCO) announced a new project for its Committee 6 on Credit Rating Agencies (C6). The project’s aim is to gain a better understanding of the credit rating industry and in particular, non-traditional credit rating agency products such as private ratings, indicative ratings, credit default swap spreads and portfolio assessment tools. Users of such non-traditional credit rating agency products are asked to answer a questionnaire by July 31, 2015. (6/30/2015) IOSCO press release.
IOSCO consults on best practices for investment funds. The IOSCO published “Elements of International Regulatory Standards on Fees and Expenses of Investment Funds,” a consultation report which proposes an updated set of common international standards of best practice for the operators of Collective Investment Schemes. Comments should be submitted by September 23, 2015. (6/25/2015) IOSCO press release.