On December 20, ISDA and the Association for Financial Markets in Europe (AFME) submitted a joint comment letter to the European Commission (EC) on their consultation on the revised Capital Requirements Regulation (CRR3).
The Basel III framework is a central element of the Basel Committee on Banking Supervision’s response to the global financial crisis. It aims to address a number of shortcomings in the pre-crisis regulatory framework and provides a foundation for a resilient banking system to avoid the build-up of systemic vulnerabilities.
The main objective of the latest revisions incorporated into the framework is to reduce excessive variability of risk-weighted assets (RWA). The key (and most impactful) measure to address this is the Output floor which sets the minimum amount of capital a bank can draw from use of internal models based approaches to 72.5% of the capital required under the standardised approach. The CRR3 proposals will also include significant changes to the Credit risk and Operational Risk framework, as well as implementing other reforms related to credit valuation adjustment risk and market risk.
ISDA continues to work closely with EU regulators as they seek to implement the final revisions to Basel III in the EU.
Documents (1) for ISDA Responds to EC Consultation on CRR3 Implementation
Latest
Recognition of Cross-product Netting is Critical
US regulators are in the process of making important changes to the regulatory capital framework by proposing modifications to the enhanced supplementary leverage ratio, which should help stop it from acting as a non-risk-sensitive constraint on bank capacity – a...
ISDA, GFXD Response to FCA on SI Regime
On September 10, ISDA and the Global Foreign Exchange Division (GFXD) of the Global Financial Markets Association responded to the Financial Conduct Authority's (FCA) consultation paper CP25/20 on the systematic internalizer (SI) regime for derivatives and bonds. ISDA and the...
ISDA, IIF Response to PRA on Market Risk Framework
On September 12, ISDA and the Institute of International Finance (IIF) submitted a joint response to the Prudential Regulation Authority’s (PRA) consultation on adjustments to the market risk capital framework (CP 17/25). ISDA and the IIF strongly believe the market...
ISDA Response on Clearing Costs
On September 8, ISDA responded to consultation by the European Securities and Markets Authority (ESMA) on a draft regulatory technical standard on clearing fees and associated costs (article 7c(4) of the European Market Infrastructure Regulation (EMIR)). In the response, ISDA...