Basel II

BCBS Issues Revisions to Basel Securitization Framework

The Basel Committee on Banking Supervision (“BCBS“) issued revisions to the Basel II securitization framework on December 11.

 The framework, which comes into effect in January 2018, forms part of the BCBS’s broader Basel II agenda to reform regulatory standards for banks in response to the global financial crisis. The revisions aim to address a number of shortcomings in the securitization framework highlighted by the financial crisis and strengthen the capital standards for securitization exposures held in the banking book.

 The final requirements set out in the framework incorporate feedback to two rounds of consultation in 2012 and 2013 and take account of two quality impact studies undertaking during those consultations. Compared to the 2013 proposals, this final set of requirements includes amendments that smooth the impact of maturity on capital charges, as well as technical enhancements and clarifications.

Agencies Seek Comment on Capital Rules

On December 15, the Fed, OCC, and FDIC requested comments on a proposed rule that would implement changes approved by the Basel Committee on Banking Supervision to revise the market risk capital rules for banking organizations with significant trading activity. Comments are requested within 90 days after publication in the Federal Register. The Fed, OCC, and FDIC also requested comments on a proposed rule that would amend Basel II to be consistent with the Dodd-Frank Act provisions on capital standards. Comments are requested within 60 days after publication in the Federal Register. Agencies Risk-Based Capital Guidelines Release. Agencies Basel II Release.