Bundesbank scraps Basel rules for small banks; Leverage ratio replaces buffers leaving SMEs exposed

Germany’s Bundesbank is eyeing a shortcut for small and medium-sized banks. Basel capital rules could be scrapped in favor of a single leverage ratio. No risk-weighting. No buffers. Just raw exposure. https://finanz-szene.de/banking/bundesbank-erwaegt-verzicht-auf-basel-anforderungen-fuer-kleinbanken/ The leverage ratio was never meant to stand …

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FDIC Chair: “In the near term, the FDIC, together with the Federal Reserve & the Office of the Comptroller of the Currency, will issue a notice of proposed rulemaking to seek public comment on changes to the U.S capital framework to consider how best to incorporate the finalization of Basel III.”

by Dismal-Jellyfish Source: https://www.fdic.gov/news/speeches/2023/spjun2223.html TLDRS: After the 2008 financial crisis, banks were found to be undercapitalized and over-leveraged, leading to a complete overhaul of capital requirements through a set of rules known as Basel III. The aim was to ensure banks …

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