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Output Floor, Leverage Ratio, and Other Regulatory Requirements

  • Ioannis Akkizidis
  • Lampros Kalyvas
Chapter

Abstract

The newly proposed banking supervision standards have triggered ambiguity amongst banks and supervisors (Economist, Polishing the floor: Supervisors put off finalising reforms to bank-capital rules—Disagreement over revisions to Basel 3 cause delay, 2017) as is always the case before the finalisation of the Basel framework (see also Economist, A twist or two of Basel: Europe and America cannot agree on new global banking rules, 2007, for the debate on Basel II/III). Supervisors from certain jurisdictions echoed that the internal models produce risk weight (RW) which are unjustifiably lower than the SA-equivalent RW and thus lead to less capital which could place financial stability at stake.

Also, the current chapter discusses the final Basel III amendments on leverage ratio framework without, however, providing evidence on the direction of a potential impact. Finally, the existing chapter refers to the residual impact of other Basel regulatory reforms (TLAC) and how banks could approximate the assessment of the holistic impact of all reforms on RWA, capital requirements, and the cost of funding.

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Copyright information

© The Author(s) 2018

Authors and Affiliations

  • Ioannis Akkizidis
    • 1
  • Lampros Kalyvas
    • 2
  1. 1.Employed by Wolters KluwerZurichSwitzerland
  2. 2.Employed by European Banking AuthorityLondonUK

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