Capital Regulation

Cabinet extends VAT exemption three more years for small firms, cuts reserve requirement at banks, commits to increasing financing options; PBOC reforms medium term lending facility to increase funding for SMEs.

The adoption of Singapore’s equivalent of IFRS 9 will be neutral for bank capitalisation, but changing risk and macroeconomic conditions could lead to varying levels of provisioning, says Moody's.

Banks with assets over CNY 200 million will be subject to NSFR and LCR requirements; new rules take effect from July 1.

Organisation representing bank employees filed a writ against RBI February circular on provisioning norms which has resulted in heavy losses at public sector banks

Every banking system at the bottom of the financial pool crosses paths eventually, and in desperate times only a tangled morass of regulations versus sovereign imperatives awaits.

Banks like Bank of China, Agriculture Bank of China, BOCOM and ICBC received upgrades on the back of an upgrade to China’s macro profile.

SAFE also simplified the process for transferring NPLs to foreign investors for non-banks; previously only banks were allowed to sell bad debt to foreign investors.

The 100 basis point RRR reduction is expected to help facilitate healthy price discovery on the cost of funds in the financial system.

BNZ reported a 34 basis point overstatement of its capital adequacy ratio in its most recent quarterly earnings due to data collection error, marginal overstatement of capital adequacy due to mistakes in collateral value calculation.

FRTB will force banks to change their operating models, bringing them out of product and trading desk silos. Bank trading culture and the trading desk concept may need to evolve to accommodate a wider picture of risk taking.