Latest news with #bankingregulation
Reuters
4 days ago
- Business
- Reuters
France to drop extra capital demand for banks exposed to indebted companies
PARIS, June 2 (Reuters) - France will not renew a two-year measure that required its biggest banks including BNP Paribas ( opens new tab and Societe Generale ( opens new tab to hold extra capital against their exposure to highly indebted companies, the financial stability council said on Monday. The measure, put in place in August 2023, requires the French lenders, which also includes Credit Agricole ( opens new tab and BPCE, to hold more capital when their exposure to a single large company with high debt levels exceeds 5% of their core capital, or CET1. In such cases, banks must set aside an extra 3% of that exposure in top-tier capital. The year 2023 was marked by heavy debt restructurings in France, including high-profile cases like retail group Casino. The need to simplify macroprudential rules and lower debt levels today at the affected companies justifies dropping the measure, an official at the finance ministry said. The council, which is chaired by Finance Minister Eric Lombard and includes the central bank governor, also said it would maintain the so-called countercyclical capital buffer at 1.0%, as it did not see the measure negatively affecting new loan production.
Bloomberg
26-05-2025
- Business
- Bloomberg
Ring-Fencing Was a Good Idea That UK Banking No Longer Needs
UK banks want the government to abolish a key piece of post-financial crisis regulation that forces them to keep ordinary depositors' money legally separate from their trading and investment-banking business. This uniquely British setup, known as ring-fencing, limits the kind of lending banks can do and raises their costs. Well, most lenders don't like it. Barclays Plc alone is happy with the rules, which may be because it is uniquely placed to benefit from any protections they afford. I was always a big supporter of the idea behind this separation, but I'm no longer convinced the setup achieves much at all — for depositors or for Barclays.
Reuters
12-05-2025
- Business
- Reuters
Global banking regulators agree to prioritise climate risk work
LONDON, May 12 (Reuters) - Global banking regulators on Monday agreed to intensify efforts to better understand the financial risks posed by climate change amid pushback from the United States. The oversight body of the world's forum for banking regulators met on Monday to take stock of the committee's work on climate-related financial risks and agreed to prioritise efforts to understand financial risk implications of extreme weather events, the Bank for International Settlements said in a statement. The agreement comes as policy makers and banking regulators on both sides of the Atlantic are debating the extent to which climate change should be embedded into central bank policy, a tussle analysts say is likely to shape central bank decision making around the world. In Europe, rulemakers have doubled down on efforts to address climate-related risks, with the European Central Bank making management of climate risks a key priority; in the United States, efforts have been scaled back or shelved. The group of central bank governors and heads of supervision, which make up the oversight body of the Basel Committee on Banking Supervision, also said it will publish a voluntary disclosure framework on climate-related financial risks for jurisdictions to consider. While the Basel Committee has no international authority or enforcement powers, its work on climate sets international standards which have a strong influence on national rulemaking. Analysts say its thinking is more closely aligned to European and British regulators which are taking steps to integrate climate risks into supervisory expectations for banks than to those in the United States. In recent years, the U.S. Federal Reserve has taken some steps to integrate climate change into its work through preliminary analysis and reports, but Chair Jerome Powell has repeatedly insisted the Fed has a limited role to play. More recently, U.S. President Donald Trump and other climate-sceptic Republicans have led a backlash against policies linked to environmental, social and governance issues across government, from coal mining to electric vehicles and DEI. In January, the Fed withdrew from, opens new tab the Network of Central Banks and Supervisors for Greening the Financial System (NGFS), a global body of central banks and regulators devoted to exploring ways to police climate risk in the financial system. The U.S. Treasury Department's Office of the Comptroller of the Currency in March withdrew from a jointly agreed set of climate principles for large U.S. banks, calling the framework "overly burdensome and duplicative". Law firm Mayer Brown said in April it expects the Federal Deposit Insurance Corporation ("FDIC") and Fed to withdraw from the joint climate principles in the near future.
