On 14 December 2022, the Financial Stability Board (FSB) published its assessment of the effectiveness of the FSB’s 2017 recommendations on liquidity mismatch in open-ended funds (OEFs). The assessment, which forms part of the FSB’s work programme to enhance the resilience of non-bank financial intermediation (NBFI), includes proposals for further policy work in this area. … Continue Reading
On 5 October 2022, the Basel Committee on Banking Supervision issued a report, Buffer usability and cyclicality in the Basel framework. The report is the Basel Committee’s second report on the impact and effectiveness of the implemented Basel reforms and provides an in-depth examination of several questions regarding buffer usability and cyclicality of the Basel … Continue Reading
On 29 September 2022, the Basel Committee on Banking Supervision (Basel Committee) published a report concerning a review of margining practices. Background In non-centrally cleared markets, the Basel Committee and the International Organisation of Securities Commissions (IOSCO) developed a framework that established minimum standards for margin requirements for non-centrally cleared derivatives (although not non-centrally cleared … Continue Reading
On 7 July 2022, the Basel Committee on Banking Supervision (Basel Committee) issued high-level considerations on proportionality that are intended to provide practical support to supervisory authorities seeking to implement proportionality into their domestic regulatory and supervisory frameworks. The high-level considerations seek to support the decision-making process of proportionality in a broad variety of jurisdictions, … Continue Reading
On 30 June 2022, the Basel Committee on Banking Supervision (Basel Committee) issued its second public consultation paper on the prudential treatment of banks’ cryptoasset exposures. In the second consultation paper the Basel Committee continues with the basic structure outlined in its first consultation by dividing cryptoassets into two broad groups: Group 1 includes those … Continue Reading
On 27 May 2022, the Basel Committee met and approved a finalised set of principles for the effective management and supervision of climate-related financial risks. The Committee also progressed work on specifying crypto-asset prudential treatment and issuing a second consultation paper. Additionally, the Committee finalised the review of the treatment of cross-border exposures within the … Continue Reading
What’s on the regulatory horizon for financial services firms? In the latest instalment of our Regulation Around the World series we focus on horizon scanning with members of our global financial services team exploring some of the key upcoming regulatory trends. Our global updater focussing on horizon scanning is accompanied by further analysis in our … Continue Reading
On 9 November 2021, the Basel Committee on Banking Supervision announced that it had finalised a technical amendment to the Basel Framework which relates to the process used by the Committee to review the Global Systemically Important Bank assessment methodology. The Committee has replaced the prior three year review cycle with a process of ongoing … Continue Reading
On 14 October 2021, the Basel Committee on Banking Supervision (BCBS) issued a progress report on the adoption of the Basel regulatory framework. Basel III was developed by BCBS as an internationally agreed set of measures in response to the global financial crisis of 2007-2009. The measures within the regulatory framework aim to strengthen the … Continue Reading
On 8 September 2021, the Basel Committee on Banking Supervision published a speech given by its Secretary General, Carolyn Rogers, entitled Basel III and global cooperation: where do we go from here? During the course of her speech Carolyn Rogers addresses, among other things, some of the more common arguments that have been used to … Continue Reading
On 20 July 2021, the Basel Committee of Banking Supervision published a consultation document setting out a technical amendment to the Basel framework. The amendment sets out a new process that will be used by the Committee to review the assessment methodology for global systemically important banks (G-SIBs). The Committee plans to replace the existing … Continue Reading
On 13 July 2021, the Financial Stability Board (FSB) published an interim report on the lessons learnt from the COVID-19 pandemic from a financial stability perspective. Among other things the interim report notes that: So far, the global financial system has weathered the COVID-19 pandemic thanks to greater resilience, supported by the G20 reforms, and … Continue Reading
On 1 July 2021, the Basel Committee on Banking Supervision published two technical amendments to the standard on minimum haircut floors for securities financing transactions (SFTs). The first technical amendment addresses an interpretative issue relating to collateral upgrade transactions and the second corrects for a misstatement of the formula used to calculate haircut floors for … Continue Reading
On 5 March 2021, the International Organization of Securities Commissions (IOSCO) launched a thematic review of the 2018 Recommendations for Liquidity Risk Management for Collective Investment Schemes. The thematic review aims to assess the extent to which the Recommendations have been implemented through IOSCO member regulatory frameworks. It also aims to gather information about how … Continue Reading
On 26 January 2021, the Basel Committee on Banking Supervision published for consultation two technical amendments to the standard on minimum haircut floors for securities financing transactions (SFTs). Technical amendments are defined as changes in the Basel standards that are not substantial in nature but that cannot be unambiguously resolved based on the current text. … Continue Reading
On 10 December 2020, the Basel Committee on Banking Supervision issued the results of its latest Basel III monitoring exercise, based on data as of 31 December 2019. The report sets out the impact of the Basel III framework that was agreed in 2010 as well as the effects of the Basel Committee’s finalisation of … Continue Reading
On 26 November 2020, the Basel Committee on Banking Supervision published a technical amendment ‘Capital treatment of securitisations of non-performing loans’. The technical amendment closes a gap in the Basel framework by setting out prudent and risk sensitive capital requirements for non-performing loan securitisations. The Basel Committee has agreed to add the following elements to … Continue Reading
The Office of the Superintendent of Financial Institutions (OSFI) has recently issued a ruling regarding the regulatory treatment of Limited Recourse Capital Notes (LRCNs) which are currently being adopted as new financial instruments by Canadian banks. An LRCN is a subordinated note issued by a federally regulated financial institution (FRFI) that is secured by preferred … Continue Reading
The Office of the Superintendent of Financial Institutions (OSFI) recently addressed a letter to deposit taking institutions (DTIs), including domestic systemically important banks (D-SIBs) and small and medium-sized banks (SMSBs), regarding the use of Pillar II capital buffers during the COVID-19 pandemic. The key takeaways are below: Capital expectations framework for DTIs. The current DTIs … Continue Reading
In our earlier post, we discussed the Office of the Superintendent of Financial Institutions’ (OSFI) newly proposed measures intended to support federally regulated financial institutions and improve the stability of the Canadian economy and financial system in the face of challenges posed by the COVID-19 pandemic. OSFI has recently published additional announcements for sector-specific measures … Continue Reading
The Office of the Superintendent of Financial Institutions (OSFI) has announced measures intended to support federally regulated financial institutions (FRFIs) and improve the stability of the Canadian economy and financial system in response to challenges posed by the COVID-19 pandemic and current market conditions: Domestic Stability Buffer set to 1.00% of risk weighted assets. Originally, … Continue Reading
The Office of Superintendent of Financial Institutions (OSFI) stated recently that it is in the process of revising its capital requirements for operational risk applicable to deposit-taking institutions (DTIs) to reflect the final Basel III revisions published by the Basel Committee on Banking Supervision in December 2017. OSFI confirmed that the implementation of the revised … Continue Reading
The Office of the Superintendent of Financial Institutions (OSFI) has issued proposed revisions (the Revisions) to certain chapters of the Liquidity Adequacy Requirements (LAR) guidelines. The LAR set out the framework that Canadian deposit-taking institutions (DTIs) must follow to mitigate the risk of a stressed environment leading to insufficient liquidity. The Revisions are a response … Continue Reading
The Office of the Superintendent of Financial Institutions (OSFI) has issued its final version of the Capital Adequacy Requirements (CAR) guideline and Leverage Requirements (LR) guideline. OSFI updates its CAR guideline periodically to ensure capital requirements reflect the underlying risks and developments in the financial industry. The LR guideline supplements this by setting out the … Continue Reading
