The Basel Committee on Banking Supervision flagged a number of its member jurisdictions — including the US, EU and Japan — for failing to adopt two liquidity and capital standards that are part of its post-crisis regulatory framework.
The 2014 liquidity guidance, called the net stable funding ratio, seeks to prevent banks from relying too heavily on volatile, short-term borrowings. The NSFR limits use of these borrowings to fund assets that aren’t easily converted to cash in a crisis.
The 2013 capital standard sets requirements for banks’ equity investments in funds that participate in shadow banking — including hedge funds, managed funds and investment funds. It applies to investments held in institutions’ banking books rather than their trading books.
Basel prods US, EU, Japan, among other laggards, to adopt two post-crisis rules
1 November 2018 7:25am