April 2010
In the wake of the financial crisis the banking regulatory authorities are making proposals to improves liquidity risk management and control of liquidity risk exposures in credit institutions along with changes to the requirements for regulatory capital.
The ACT has made responses to selected issues arising from two consultation documents:
Basel Committee on Banking Supervision – Consultation: Strengthening the resilience of the banking system.
European Commission Services Staff Working Document: Possible further changes to the capital requirements directive
In responding to these consultations the ACT has welcomed moves to address the stability of the financial system but warns that it is important to leave it fit for purpose in serving other sectors.
It is important that regulation does not make the provision of financial services to non-financial companies excessively difficult or unreasonably costly. The punitive increases in the capital required against un-margined OTC derivative transaction is a case in point.
