basel iii impact - la caixa june 2010
TRANSCRIPT
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The impact for Spain of the new banking regulationsproposed by the Basel Committee
Jordi GualChief Economist and Head of Research, la Caixa
Meeting of the Group of Experts in the Banking Industry (GEBI)Brussels, June 14th 2010
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Agenda1. Overview of main regulatory proposals
2. Outline of the estimation approach
3. Capital requirements
4. Liquidity requirements
5. Results
6. Possible impact on monetary policy, banking businessand products
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1. Overview of regulatory proposals
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Identified problemsCurrent regulatory
proposals
Wholesale funding
(securitization)
Procyclical regulation
House prices
CompensationCompetition for market share
Misjudgement of risk
Ineffective supervision
Transparency (rating agencies)
Liquidity regulation
Countercyclical capital
Taxes
Monetary policy
Rules on compensation; taxes Revision of accounting rules
Quality and quantity of capital
More effective supervision
Restrictions on size Living wills
Central counterparties
Corporate governance
Overview over current regulatory proposals
Leverage
Credit
Risk
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Basel II New proposal (Basel III)
New definition of Core Capital
+ Capital
+ Reserves
+ Retained Earnings
+ Minority interests
Deductions:
Goodwill and intangibles
Revalorization reserves and others
+ Capital
+ Reserves
+ Retained Earnings
Deductions:
Goodwill and intangibles
Revalorization reserves and others Minority stakes in banks (>10%) and insurance (>20%)
Deferred tax assets
Shortfall of provision vs. expected loss
Other changes include:
Restrictions on hybrid capital in Tier 1
Increase of RWA for trading book
Procyclicality adjustments
Leverage ratio
Basel III proposal on solvency regulation
Specificminimum
requirement(to be defined)
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Two new liquidity ratios
Assets Liabilities
Availablestable
funding
Highlyliquid assets
Cash outflows(30 days)>