The Basel Committee on Banking Supervision (BCBS) has published a consultation paper on capital floors and the design of a framework based on standardised approaches.
The proposed framework will replace the current transitional floor, which is based on the Basel I standard, with a revised capital floor framework based on the Basel II/III standardised approaches, which allows for a more coherent and integrated capital framework.
The consultation paper covers design issues related to a capital floor framework, including:
- the scope of aggregation;
- adjustments for differences in the treatment of provisions between the standardised and internally modelled approaches for credit risk; and
- the choice of the standardised approach.
The deadline for responses to the consultation paper is 27 March 2015.
The BCBS intends to publish the final standards, including its calibration and implementation arrangements, at the end of 2015.