The changing landscape of what constitutes regulatory capital for chartered banks has claimed another type of security.
This week Canadian Western Bank announced that, come year-end, it would redeem an outstanding issue of trust capital securities, an innovative form of equity capital popular a decade and a half back. The bank’s decision affects $105 million of such securities that offered investors a 6.199 per cent yield. The securities were issued in 2006.
OTTAWA (Reuters) - Canada will press for timely implementation of the Basel III rules on bank capital at a November 4-5 meeting of finance ministers from the Group of 20 nations, a senior finance ministry official said on Thursday. The official said it was imperative the rules on tighter global capital and liquidity be adopted according to the timeline that has already been agreed. The Basel III rules are supposed to start coming into force worldwide at the start of 2013, but late agreement on many details means many banks are unprepared. ...
Alicia Damley submits:Recognizing the pro-cyclicality of BIS II rules, the Basel Committee identified counter-cyclical provisions as one of the key changes in the proposed BIS III standards. At the end of December 2010, global regulators from 27 countries agreed on implementing counter-cyclical provisions through increases in the minimum Tier 1 capital ratio by up to 2.5% (from 7% to 9.5%).
Editor's Note: Bradley Sabel is partner and co-head of the Financial Institutions Advisory & Financial Regulatory practice group at Shearman & Sterling LLP. The following post is based on a Shearman & Sterling client publication by Donald N. Lamson and Barnabas W.B.
MUMBAI: India's banks will need 910 billion rupees ($13.6 billion) in Tier-1 capital until March 2019 to grow at a bare minimum pace of 8 to 9 percent on average, India Ratings and Research said on Wednesday. Of the total capital needs, 500 billion rupees will have to come from additional Tier-1 bonds, the rating agency, an affiliate of Fitch, said. The Indian government, which owns majority in nearly two dozens lenders, has plans to inject 200 billion rupees into those banks over the next two financial years beginning April.
It wasn’t too long ago that Canada’s largest banks pined for membership in the exclusive and powerful club of the world’s largest financial giants. Now that the 2008 financial meltdown is transforming megabanks from once-mighty emblems of national pride to international pariahs, they could well end up becoming fixtures among their global peers.
European and Japanese banking officials are reportedly enraged that the (US-backed) world's top banking regulator would dare to demand banks hold higher levels of capital to meet credit, market and operational risks. These rules are not new, of course, but the bankers, used to getting their own way reportedly demanded in two heated meetings this week that The Basel Committee 'scale back; the rules to ensure the rules have no “particularly negative consequences for specific regions,” such as Europe.