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Translating Basel into Brussels

Translating Basel into Brussels. Michel Martino European Commission. BASEL - BRUSSELS. International convergence of capital measurement and capital standards – a revised framework 26-6-2004. Proposal for a Directive amending directives 2000/12/EC & and 93/6/EC on the capital adequacy of

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Translating Basel into Brussels

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  1. Translating Basel into Brussels Michel Martino European Commission

  2. BASEL - BRUSSELS International convergence of capital measurement and capital standards – a revised framework 26-6-2004 Proposal for a Directive amending directives 2000/12/EC & and 93/6/EC on the capital adequacy of banks and investement firms (recast) • Brussels,14-7-2004 • COM(2004)

  3. « SPOT THE DIFFERENCE  »

  4. Proposal for a Directive of the European Parliament and of the Council amending directives 2000/12/EC & and 93/6/EC on the capital adequacy of banks and investement firms (recast) Directive of the European Parliament and of the Council amending directives 2000/12/EC & and 93/6/EC on the capital adequacy of banks and investement firms (recast)

  5. KEY ISSUE: CONSOLIDATING ‘LEAD’ SUPERVISOR

  6. KEY ISSUE: LEVEL OF APPLICATION / WAIVERS Capital requirements apply to all individual banks BUT waivers if criteria satisfied Capital requirements & internal processes by every ‘group’ at country level Disclosure requirements apply at EU level

  7. KEY ISSUE: IMPLEMENTATION DATE SA/FIRB/BIA/SA available end 2006 AIRB/AMA available end 2007

  8. TRADING BOOK Double default & Maturity Adjustment? Counterparty credit risk? Trading Book/Banking Book?

  9. INSTITUTIONAL PROCESS: THE COUNCIL

  10. INSTITUTIONAL PROCESS: EUROPEAN PARLIAMENT

  11. Main Entry: con·ver·gencePronunciation: k&n-'v&r-j&n(t)sFunction: nounDate: 17131: the act of converging and especially moving toward union or uniformity; especially: coordinated movement of the two eyes so that the image of a single point is formed on corresponding retinal areas2: the state or property of being convergent3: independent development of similar characters (as of bodily structure or cultural traits) often associated with similarity of habits or environment

  12. 1O% capital • 6% tier 1 • leverage ratio • New: more risk buckets ? Basel 1 'plus' 60% US banking system : Basel 2 30 banks

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