Group of Governors and Heads of Supervision announces higher global minimum capital standards
12 September 2010
At its 12 September 2010 meeting, the Group of Governors and Heads of Supervision, the oversight body of the Bal Committee on Banking Supervision, announced a substantial strengthening of existing capital requirements and fully endord the agreements it reached on 26 July 2010. The capital reforms, together with the introduction of a global liquidity standard, deliver on the core of the global financial reform agenda and will be prented to the Seoul G20 Leaders summit in November.
The Committee's package of reforms will increa the minimum common equity requirement from 2% to 4.5%. In addition, banks will be required to hold a capital conrvation buffer of 2.5% to withstand future periods of stress bringing the total common equity requirements to 7%. This reinforces the stronger definition of capital
民间故事恐怖agreed by Governors and Heads of Supervision in July and the higher capital requirements for trading, derivative and curitisation activities to be introduced at the end of 2011. 退款申请模板
最火网游Mr Jean-Claude Trichet, President of the European Central Bank and Chairman of the Group of Governors and Heads of Supervision, said that "the agreements reached today are a fundamental strengthening of global capital standards." He added that "their contribution to long term financial stability and growth will be substantial. The transition arrangements will enable banks to meet the new standards while supporting the economic recovery." Mr Nout Wellink, Chairman of the Bal Committee on Banking Supervision and President of the Netherlands Bank, added that "the combination of a much stronger definition of capital, higher minimum requirements and the introduction of new capital buffers will ensure that banks are better able to withstand periods of economic and financial stress, therefore supporting economic growth."
Incread capital requirements
迷你无人机铁皮石斛的功效是什么Under the agreements reached today, the minimum requirement for common equity, the highest form of loss absorbing capital, will be raid from the current 2% level, before the application of regulatory adjustments, to 4.5% after the application of stricter adjustments. This will be phad in by 1 January 2015. The Tier 1 capital requirement, which includes common equity and other qualifying financial instruments bad on stricter criteria, will increa from 4% to 6% over the same period. (Annex 1 summaris the new capital requirements.)
The Group of Governors and Heads of Supervision also agreed that the capital conrvation buffer above the regulatory minimum requirement be calibrated at 2.5% and be met with common equity, after the application of deductions. The purpo of the conrvation buffer is to ensure that banks maintain a buffer of capital that can be ud to absorb loss during periods of financial and economic stress. While banks are allowed to draw on the buffer during such periods of stress, the clor their regulatory capital ratios approach the minimum requirement, the greater the constraints on earnings distributions. This framework
will reinforce the objective of sound supervision and bank governance and address the collective action problem that has prevented some banks from curtailing distributions such as discretionary bonus and high dividends, even in the face of deteriorating capital positions.
A countercyclical buffer within a range of 0% - 2.5% of common equity or other fully loss absorbing capital will be implemented according to national circumstances. The purpo of the countercyclical buffer is to achieve the broader macroprudential goal of protecting the banking ctor from periods of excess aggregate credit growth. For any given country, this buffer will only be in effect when there is excess credit growth that is resulting in a system wide build up of risk. The countercyclical buffer, when in effect, would be introduced as an extension of the conrvation buffer range.
The capital requirements are supplemented by a non-risk-bad leverage ratio that will rve as a backstop to the risk-bad measures described above. In July,
Governors and Heads of Supervision agreed to test a minimum Tier 1 leverage ratio of 3% during the parallel run period. Bad on the results of the parallel run period, any final adjustments would be carried out in the first half of 2017 with a view to migrating to a Pillar 1 treatment on 1 January 2018 bad on appropriate review and calibration. 八本最强阵型
Systemically important banks should have loss absorbing capacity beyond the standards announced today and work continues on this issue in the Financial Stability Board and relevant Bal Committee work streams. The Bal Committee and the FSB are developing a well integrated approach to systemically important financial institutions which could include combinations of capital surcharges, contingent capital and bail-in debt. In addition, work is continuing to strengthen resolution regimes. The Bal Committee also recently issued a consultative document Proposal to ensure the loss absorbency of regulatory capital at the point of non-viability. Governors and Heads of Supervision endor the aim to strengthen the loss absorbency of non-common Tier 1 and Tier 2 capital instrumen
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Transition arrangements
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