|
|
 |
|
Viewing report
|
|
|
|
Proposed Basel II Rules Would Require Banks To Hold More Capital Against Trading Risk May 09
Standard & Poors, May 2009
Abstract
The Basel Committee's proposed changes to Basel II for financial institutions worldwide would require banks to hold more capital than they do now against their trading books. This will be more consistent with underlying market risks. Standard & Poor's Ratings Services believes that the proposed regulatory capital requirements for market risk are likely to be less procyclical than current rules. In our view, the proposed changes are positive, particularly as they are likely to improve the treatment of specific risk, illiquidity risk, as well as stressed market movement risk, which are underestimated in the current regulatory framework. Due to the underweighted regulatory capital requirements for the trading book under current rules, returns on equity on banks' trading activities were artificially...
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
|
|
|
|
