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Barnier Hints at Longer Pensions Clearing Exemption

By Cecile Sourbes
Published September 12, 2014 Risk

The EC's head of internal markets, Michel Barnier, has hinted that the regulator will extend the pension funds derivatives clearing exemption beyond 2015

The European Commission's outgoing head of the internal market and services division, Michel Barnier, has hinted that the EC will extend the temporary exemption pension funds have from mandatory clearing of their over-the-counter derivatives trades beyond 2015.

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Banks Face More Oversight of Ability to Weather Credit Crunch

By Jesse Hamilton
Published September 3, 2014 Bloomberg

U.S. regulators, closing in on their mandate to force financial firms to prove they can weather another credit crisis, are set today to finish two key rules governing the banks’ balance sheets.

The Federal Reserve, Office of the Comptroller of the Currency and Federal Deposit Insurance Corp. are ready to issue a mandate that banks set aside enough easy-to-sell assets to survive a 30-day liquidity drought and wrap up rules on how much loss-absorbing capital must be held against total assets.

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Banks Face 2016 Risk Deadline

By Staff
Published May 15, 2014 Markets Media

Global systemically important banks, or G-SIBs, are having a tough time complying with principles laid down by the Basel Committee on Banking Supervision for risk data aggregation and risk reporting.

G-SIBs are required to implement the principles in full by the beginning of 2016, and the Committee is monitoring their progress towards meeting this deadline. In addition, the Committee strongly suggests that national supervisors apply these principles to institutions identified as domestic systemically important banks three years after their designation as such.

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Banks Turn to Compression to Meet New Basel Rules

By Philip Stafford
Published March 31, 2014 Finanical Times

Until recently, the Basel III capital requirements had never been a central part of the post-crisis debate by the derivatives industry. No longer.

Banks’ concerns over a rule change introduced by the Basel Committee on Banking Supervision (BCBS) in January are deepening as they digest the implications for their large derivatives portfolios.

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Basel Leverage Ratio May Force CSA Restructuring

By Matt Cameron and Lukas Becker
Published January 14, 2014 Risk

Banks will only be allowed to reduce derivatives exposure with cash variation margin under the final Basel leverage ratio rules if it is in the same currency as the underlying swap. This, they claim, is a ridiculous hurdle, as it will force them to restructure their existing collateral agreements.

The rule could also deal a blow to the new standard credit support annex (SCSA).

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Basel Tries to Create Clearing Pull with New Capital Rules

By Matt Cameron and Lukas Becker
Published July 2, 2013 Risk

The Basel Committee on Banking Supervision has revamped its capital rules for cleared exposures after deciding an interim regime published last July had "fallen short of the desired objectives", producing a range of charges that was difficult to justify. Regulators feared the rules could have removed incentives for derivatives market participants to use central counterparties (CCPs) – a fear shared by dealers, which had been pushing their own alternative approach.

The latest proposals rely in part on separate draft rules for a new, standardised approach to the measurement of credit risk, known as the non-internal model method (Nimm). These proposals were published alongside the draft rules for cleared exposures on June 28. Bankers are still digesting the implications of the two documents, but early reactions have been positive.

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Basel Leverage Rules to Put Pressure on Wall Street

By Dominic Elliot
Published June 26, 2013 New York Times' DealBook

The Basel committee’s effort to harmonize leverage rules will raise the heat on Wall Street. The global regulator wants banks to present a leverage ratio metric that would include additional notional values for derivatives. That would limit significantly the ability of American lenders to offset opposing derivatives trades.

Basel’s proposals aim at creating the sort of level playing field that banks usually beg for. At the end of last year, none of the Wall Street’s five largest banks — Bank of America, Citigroup,Goldman Sachs, JPMorgan Chase and Morgan Stanley — reported leverage of more than 20 times equity, as a result of the leniency of generally accepted accounting principles toward derivatives exposures.

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EU Eyes March 22 Deadline for Basel Law to Avoid Delays

By Rebecca Christie and Caroline Connan
Published February 26, 2013 Bloomberg

The European Union must press ahead with global bank capital standards to avoid fresh delays and to give certainty to lenders that must abide by the overhaul, the bloc’s financial services chief said today.

“We need agreed rules as soon as possible so that banks know which way they are going,” Michel Barnier said in an interview on the sidelines of a conference in Paris.

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Non-Cleared Margin Proposals Still Miss the Point

By David Clark
Published February 22, 2013 The Trade

The latest approach by global regulators to establish a framework for margin payments against non-cleared swaps will eliminate some unnecessary costs but still fails to address the core concerns of banks.

A joint consultation last week from the International Organization of Securities Commissions (IOSCO) and the Basel Committee on Banking Supervision (BCBS) proposed an exemption for initial margin payments on the first €50 million of bilateral swaps deals. Variation margin would need to be posted, based on the mark-to-market value of a trade on a daily 

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EBA to Rank Most-Liquid Securities for Hitting Basel Goal

By Ben Moshinsky
Published February 21, 2013 Bloomberg

Europe’s top banking regulator will start ranking financial assets in order of liquidity as it implements international rules to protect banks from a sudden loss of short-term funding.

The European Banking Authority will create a “scorecard” of asset liquidity, the agency said in an e-mailed statement, as part of requirements that banks hold a buffer of assets, known as the Liquidity Coverage Ratio, they can quickly sell to survive a 30-day credit squeeze.

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