Capital Regulation

The FSB says further efforts are needed to ensure that TLAC will be available in the right amounts at all locations within a group during a crisis.

The submissions from the RBNZ consultation on raising bank capital requirements show the proposals have broad public support, including from "most banks".

The RBI has reduced the leverage ratio from 4.5% at present to 4% for D-SIBs (domestic systemically important banks) and 3.5% for other banks.

The amendments expand the scope of HQLA recognisable as "level 2B assets" under the LCR and introduce a 5% stable funding requirement on total derivative liabilities under the NSFR.

The RBI says gross NPA ratios and loan provisioning are improving, but it warns that capital adequacy at some banks will fall below requirements without more government cash.

Lenders were found to be favouring borrowers with deposits at their banks, linking loans to the sale of other products, and illegally charging financing fees.

The leverage ratio revision permits cash and non-cash forms of margin received from clients to offset the replacement cost and potential future exposure for client cleared derivatives.

The five bank holding companies and their subsidiary banks will be required to set aside additional common equity capital of 1% for 2020.

The letter reports on the FSB's work to monitor financial stability risks, reform implementation progress, and market fragmentation issues.

The crackdown on shadow banking activities will continue to moderate this year as China prioritises economic growth and smaller banks continue to face funding pressures, Moody's said.