econintersect.com
       
  

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.



posted on 28 November 2015

Safety Nets For The World's Biggest Banks

Written by

On November 9th the FSB, or Financial Stability Board, added a loss-absorbency requirement for the world's biggest banks to be implemented by 2019. The FSB has included banks it considered "systematically important" and those that made the list, such as JPMorgan Chase & Co. and HSBC, will now need capital or loss-absorbent debt equal to 16% of their risky assets by 2019. Banks that are big enough to fit this requirement will see an increase to 18% of risky assets by 2022.

A further leverage ratio requirement will also be introduced, rising from 6% in 2019 to 6.75% by 2022. The main purpose of these new requirements is to ensure banks will be able to restructure without public recourse in the case of crisis. The final intent of the legislation is to prevent banks from holding each other's risk-absorbing assets. HSBC, Europe's largest bank, has estimated the cost of compliance under these new restrictions could be up to $300 million a year. The total cost of this, including all banks under these regulations, could near $1.19 trillion in new assets. Interestingly enough, however, these rules are unable to legally be enforced unless the regulators of countries approve it.

Eight out of the 20 or so banks that will fall under this proposed legislation are located within the United States. The US Federal Reserve has proposed stricter rules than those proposed by the FSB and believes the cost under the proposed rules would only be able $120 billion. This is about 10% of the total estimated cost by the FSB including nearly half of the banks, which means the other banks in the list have much more ground to cover. Any assets involved with derivatives are not allowed and they must have at least one year of remaining maturity left. Large banks based in emerging markets will face the exact same requirements but will have longer deadlines to meet them.

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical News Post Listing










Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, using Livefyre just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.



You can also comment using Facebook directly using he comment block below.





Econintersect Contributors


search_box

Print this page or create a PDF file of this page
Print Friendly and PDF


The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.


Take a look at what is going on inside of Econintersect.com
Main Home
Analysis Blog
Joan Robinson’s Critique of Marginal Utility Theory
The Truth About Trade Agreements - and Why We Need Them
News Blog
How Can The UK Government Meet Its Legal Air Pollution Targets?
Most Gun Deaths In The United States Have A Tragic Motive
What We Read Today 08 December 2016
Five Mysterious Space Diseases That Could Kill Astronauts Before They Get To Mars
03 December 2016 Initial Unemployment Claims Rolling Average Insignificantly Worsens
November 2016 CBO Monthly Budget Review: Down by 3 Percent in the First Two Months of Fiscal Year 2017
Putting Grassroots Terrorism In The Proper Perspective
Crude Oil Prices: "Random"? Hardly. The More Emotional The Market, The More Predictable It Is.
Infographic Of The Day: Job-Hopping
Early Headlines: Asia Stocks Up, Oil Firms, Russia's Big Oil Deal, Trump Will Stay In Business, Trump Menaces Drug Cos, Banks Rig Silver, Italy's 360B NPL, Iraq Has Oil Cut Problem, China Trade Improves And More
Goals Come With A Hefty Price Tag At The Emirates
Facebook Strongest On Home Ground
Defence Budgets Are Surging In The Baltic States
Investing Blog
Trumpsternomics And Economic Growth
The Real 401k Plan Manager 07 May 2016
Opinion Blog
Italy Confronts The European Elite
The US Government Needs To Spend More
Precious Metals Blog
Silver Prices Rebounded Today: Where They Are Headed
Live Markets
08Dec2016 Market Close: Wall Street Closes Higher, But Not Without Pause For Indicators That Spell CAUTION In Capital Letters
Amazon Books & More






.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government



Crowdfunding ....






























 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2016 Econintersect LLC - all rights reserved