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Banks unite in concerns over capital requirements directive

Wednesday 12 May 2010 - by Luke Nelson


Most retail loans, it argues, are weighted at 100 per cent (mortgages), with the rest at 85 per cent (short-term unsecured) and retail deposits over one year are weighted at 100 per cent.

Nordea suggests that the introduction of a leverage ratio is likely to create wrong risk management incentives and induce systemic instability in Nordic markets. It argues that such a ration could severely damage market liquidity of low risk instruments in the Nordic countries.

DBS Bank (Singapore) argues that the proposed requirements on what would constitute ‘liquid assets’ may put banks operating in emerging markets at a disadvantage since there might not be a sufficient supply of qualifying debt securities in their markets.

Next steps


The Basel Committee will now consider the responses it has received to its consultations, as well as the quantitative impact study. Conclusions are likely to be reached in September and policies are expected to be published in late December or early 2011.


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