RSS feedBasel III
’Citi’s Basel-dodging, capital-avoiding, accounting switch
Citi doing weird accounting manoeuvres? Perish the thought!
From the bank’s first-quarter results press release:
In the first quarter 2011, Citigroup transferred $12.7 billion of assets in the Special Asset Pool in Citi Holdings from HTM to trading.
An MEP out to risk-weight the eurozone
Here’s a tip for all financial journalists and market participants.
To spot the next source of financial instability — simply identify the assets currently considered ‘safest.’ At the moment we’d argue those are covered bonds,
Choose your own risk retention
So now that the Federal Reserve has gifted US banks with a one-size-does-not-fit-all policy in (some) securitisation risk retentions, which version will they be going for?
After all, they’ve got horizontal and vertical (and even L-shaped) slices to choose from.
Covered bonds as the new sovereigns
Non-German readers won’t be able to read this article by a representative of the German finance ministry (except, perhaps, through the magic of Google Translate).
But we can summarise it for you.
The author,
Bank dividend day
And so it begins, again.
No surprise that the KBW Bank Index and the financials component of the S&P 500 both beat the broader index (red line below) on the day:
We’ve known that Bank Dividend Day was coming since last November,
The where and what of regulatory arbitrage
Get the little flags at the ready: on Tuesday JP Morgan Cazenove published the final installment of its trio of reports on regulatory arbitrage.
It is stirring patriotic sentiment up on Capitol Hill,
RBS’s lingering event risk
Progress at the bailed-out RBS, in table-form:
That’s almost every risk measure improving except for one — Core Tier 1 capital. Here the bank, which has released annual results on Thursday, has seen its regulatory buffer decrease from 11 per cent in 2009 to 10.7 per cent in 2010.
Another bank non-call, an entirely new reaction
Cast your minds back to the (heady) final days of 2008 — when Deutsche Bank rattled the bond market by opting not to call one of its Tier 1 subordinated bonds.
The decision spooked bank debt investors.
Basel III blurs
Here’s a capital curio for investors in Credit Suisse’s Monday-announced CoCos issue.
It’s probably not a surprise that a transition from the Basel II to Basel III regulatory regimes might create some scope for capital confusion.
Has the Fed’s exit strategy been Basel-ed?
A piece of the Fed’s exit strategy in tatters because of Basel III? Perish the thought.
Yet RBC Capital Market’s Mike Cloherty certainly seems to think so in a short note published late on Thursday.
Silent capital, backdoor Basel
Two months after Basel III formally landed and the lobbying has intensified.
According to Euro Intelligence — citing an FT Deutschland story — it’s not the banks pushing for some tweaks, but the sovereigns guaranteeing them.
Why bank capital is rubbish
How much bank capital is just enough bank capital to survive a crisis?
Reading this Bank of England paper on the issue, you might think the authors are simply arguing that banks ought to be made to hold more loss-absorbing capital (double,
Spain’s smallish, wrongish, non-Basel III, bank steps
By Tracy Alloway and Joseph Cotterill
Just how Basel III is Spain’s recently-announced bank recapitalisation plan?
Spain’s finance minister announced on Monday that Spanish banks would have to recapitalise by the end of September.
The problem with Europe’s bail-ins
Here’s something to ponder while we wait for the European Commission’s consultation document on haircuts for senior investors in Europe’s banking debt.
It’s what all this talk of Basel III — plus burdensharing,
Basel liquidity rules, going neo-medieval
Can we talk a bit more about the scandal of Basel III allowing banks to give government bonds a zero risk weighting on their books? This time regarding Basel’s liquidity rules.
Actually, can we talk about the related global shortage of AAA-rated assets and what that means for sovereign debt as well?
Buried in recent regulations on Basel’s liquidity coverage ratio,
Basel-ed again
Believe us, it’s taken all our willpower to not headline this post as Basel Faulty.
The London Banker has returned to blogging after a two-year hiatus. And boy, that 24-month break has done nothing to quell this former central banker’s ire.
Basel III has landed – for real
It’s here — some 200 pages of new capital rules for banks from the Basel Committee.
Click below to get the 77-pager Basel III framework doc:
And below for government guidance in implementing the countercyclical buffers:
Arbitrasel and the deployment of capital
Don’t be too comforted by this chart of US banking industry capital from broker-dealer Keefe, Bruyette & Woods:
Why not? First have a look at what KBW thinks is significant about these increased capital levels:
Balance sheet optimisation BOOM
All hail Standard Chartered’s new synthetic Collateralised Loan Obligation:
2 December 2010, Singapore – Standard Chartered Bank has completed its sixth Collateralised Loan Obligation (CLO), START VI CLO,
Risk-weighting the eurozone
Presenting one of the more ironic headaches for sovereign issuers and European banks out there at the moment. At any rate, we’d point to a great story from Joel Clark and Ellen Davis of Risk Magazine.
We’ve noted Europe’s increasingly two-tiered government bond market before.
The USD covered-bond-apalooza
Earlier this year we wrote about the unexpectedly stringent provisions for covered bonds to be imposed by Basel III, in particular with respect to their treatment in the liquidity coverage ratio and the net stable funding requirement.
A year (and a bit) of Basel, recapped
Worthwhile reading on Tuesday — 22 pages of a Basel Committee on Banking Supervision report to the G20, on its financial reform activity since a 2009 Group summit told it to get cracking.
There are good summaries here of what Basel’s new global capital and liquidity rules will do,
Standard Chartered is off to the capital races
Sheesh. How much money does one bank need?
Out on Wednesday — a £3.25bn rights issue from Standard Chartered.
It’s rather a surprise. StanChart undertook a £1bn share issue, also for capital-raising purposes,
BarCap predicts Europe’s distressed debt destiny
Whither all those rubbish European bank assets?
There are plenty of soured loans lingering in the system, on top of a €500bn-outstanding leveraged loan market still being shaken out.
Barclays Capital believes both these things could be the foundation for new European distressed debt market. And it starts around now.
European bank watch — past, present and future
Hey, institutional investors — those Basel III capital rules really are something for European banks to worry about, aren’t they?
Err…
…investors?
And that somewhat more-than-residual fear of sovereign risk is just one among many interesting results from a conference on European banking recently hosted by Bank of America Merrill Lynch.
Basel takes aim at the negative basis
Basel is busy bolting stable doors.
Indeed, one of the big drivers behind new Basel III counterparty risk capital requirements is the infamous negative basis trade.
UBS banking analysts had a good example of the trade last week:
Snap news
Breaking, pre-market news on Monday,
- Sanofi launches $18,5bn Genzyme bid – AP.
- Switzerland says UBS, Credit Suisse Group must hold almost double the capital required under Basel III – Bloomberg.