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Bank/Capital Regulation

The Basel Committee on Banking Supervision (BCBS) provides a forum to enhance understanding and improve the quality of banking supervision across the globe. The BCBS continues to develop guidelines and supervisory standards on banking, the most notable of which are its international standards on capital adequacy.

The first ‘Basel Accord’ on the international convergence of capital measurement and capital standards (Basel I) was agreed in 1988 and, after certain amendments, was superseded in 2004 by ‘Basel II’ which introduced a more risk-sensitive approach under three pillars: (i) minimum capital requirements; (ii) supervisory review; and (iii) market discipline. The most recent version, ‘Basel III: A global regulatory framework for more resilient banks and banking systems’, was published in December 2010.

Basel III, among other things, seeks to improve the banking sector’s ability to absorb shocks which arise from financial and economic stress, whatever the source, by introducing:

· higher and better-quality capital requirements;

· improved risk coverage;

· a leverage ratio as a backstop to the risk based requirements;

· measures to promote the build up of capital which can be drawn down during periods of economic stress; and

· two global liquidity standards.

Whilst primarily aimed at banks, such provisions will have an impact on hedge fund managers, in particular, due to the amount of capital a bank may be required to set asidewhen making allocations to hedge funds and the possibility that portfolio managers will be included within the scope of certain requirements of national legislation implementing the Basel III recommendations.

The requirements of Basel III will be implemented on an ongoing basis. The most recent progress report on implementation was published in October 2012.

 

Key documents

Basel III summary table

BCBS Basel III implementation report of October 2012 (October 2012)

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Sub Menu

  1. Asset Management Regulation
    1. EU Asset Management Regulation
      1. AIFMD
      2. UCITS
        1. ETFs and Structured UCITS
      3. Venture Capital
      4. MiFID / MiFIR
    2. US Hedge Fund Adviser Regulations
      1. Registration and Reporting
      2. Incentive-Based Compensation
      3. JOBS Act
    3. Asia Pacific Asset Management regulation
    4. Other Jurisdictions’ Asset Management Regulation
    5. Regulation of NBFCs / SIFIS
    6. Supervision
      1. UK regulatory reform
      2. European Supervisory Authorities
      3. US Self-Regulatory Organisations
    7. Remuneration
      1. UK
      2. US
      3. CRD IV and CRR
      4. AIFMD
      5. MiFID
    8. Shadow Banking
    9. Volcker Rule
    10. Other
  2. Markets Regulation
    1. Bank/Capital Regulation
      1. Capital Requirements Directive
    2. Derivatives/Clearing
      1. EMIR
        1. EMIR Level 1
        2. EMIR Level 2
        3. EMIR UK Implementation
      2. MiFID / MiFIR
      3. MAD / MAR
      4. Dodd-Frank Act Title VII
      5. Hong Kong
      6. IOSCO
      7. Singapore
    3. High Frequency Trading
      1. ESMA Guidelines
      2. MiFID / MiFIR
      3. MAD / MAR
      4. Flash Crash
      5. IOSCO
      6. Germany
    4. Insurance Regulation
      1. Solvency II
    5. Market Abuse
      1. MAD / MAR
      2. Indices as Benchmarks
    6. Position Limits
      1. MiFID / MiFIR
      2. CFTC Position Limits
    7. Resolution of Financial Institutions
      1. CPSS-IOSCO
      2. Financial Stability Board
      3. Europe
      4. UK
      5. USA
    8. Short Selling
      1. EU Short Selling Regulation
        1. SSR Docs
          1. SSR Level 1 - Consultations, legislative process and releated AIMA documents
          2. SSR Level 2 consultations, legislative process and related AIMA documents
          3. SSR Review
      2. Hong Kong Short Selling Regulation
      3. US Short Selling Regulation
      4. Short Selling Bans
    9. Securities Settlement
    10. Trading
      1. MiFID / MiFIR
        1. MiFIDII MiFIR Level 1 Consultations, legislative process and related AIMA documents
      2. Dodd-Frank Act
  3. Tax Affairs
    1. EU Savings Directive
    2. FAIFs and FINROFs
    3. FATCA
    4. FIN 48 and IAS 12
    5. Financial Transaction Tax
    6. Investment Manager Exemption
    7. UK Offshore Funds Regime
    8. Other
  4. Search
  5. Resources
    1. Noticeboard
      1. Bribery Act
      2. Client Assets Regime
      3. Conflicts of Interest - UK
      4. Dodd-Frank Act - Fund Manager Registration and Reporting
      5. Dodd-Frank Act - Swaps and OTC Derivatives
      6. Dodd-Frank Act - Volcker Rule
      7. EMIR - Regulation on OTC Derivatives, CCPs and Trade Repositories
      8. EU Directive on Alternative Investment Fund Managers
      9. EU Directive on Alternative Investment Fund Managers - Level II
      10. EU Short Selling Regulation
      11. FATCA
      12. FTT
      13. FSA Remuneration Code
      14. General
      15. MADII / MAR - Market Abuse Directive
      16. MiFIDII / MiFIR - Markets in Financial Instruments Directive
      17. Other Tax Issues
      18. Securities Law Directive
      19. Shadow Banking
      20. Singapore Asset Management Regime
      21. Solvency II
      22. Swiss Collective Investment Schemes Act
      23. UCITS and ETFs
      24. UK Stewardship Code
      25. US Short Selling Regime
    2. Guidance Notes
    3. Quarterly Regulatory Update
 
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