The Basel III Net Stable Funding Ratio and Bank Net Interest Margins PDF Download
Are you looking for read ebook online? Search for your book and save it on your Kindle device, PC, phones or tablets. Download The Basel III Net Stable Funding Ratio and Bank Net Interest Margins PDF full book. Access full book title The Basel III Net Stable Funding Ratio and Bank Net Interest Margins by Michael R. King. Download full books in PDF and EPUB format.
Author: Michael R. King Publisher: ISBN: Category : Languages : en Pages : 42
Book Description
The Net Stable Funding Ratio (NSFR) is a new Basel III liquidity requirement designed to limit funding risk arising from maturity mismatches between bank assets and liabilities. This study explains the NSFR and estimates this ratio for banks in 15 countries. Banks below the ratio need to increase stable sources of funding and to reduce assets requiring funding. The most cost-effective strategies to meet the NSFR are to increase holdings of higher-rated securities and to extend the maturity of wholesale funding. These changes reduce net interest margins by 70 to 88 basis points on average, or around 40% of their year-end 2009 values. Universal banks with diversified funding sources and high trading assets are penalized most by the NSFR.
Author: Michael R. King Publisher: ISBN: Category : Languages : en Pages : 42
Book Description
The Net Stable Funding Ratio (NSFR) is a new Basel III liquidity requirement designed to limit funding risk arising from maturity mismatches between bank assets and liabilities. This study explains the NSFR and estimates this ratio for banks in 15 countries. Banks below the ratio need to increase stable sources of funding and to reduce assets requiring funding. The most cost-effective strategies to meet the NSFR are to increase holdings of higher-rated securities and to extend the maturity of wholesale funding. These changes reduce net interest margins by 70 to 88 basis points on average, or around 40% of their year-end 2009 values. Universal banks with diversified funding sources and high trading assets are penalized most by the NSFR.
Author: Jeanne Gobat Publisher: International Monetary Fund ISBN: 1498346499 Category : Business & Economics Languages : en Pages : 43
Book Description
As part of Basel III reforms, the NSFR is a new prudential liquidity rule aimed at limiting excess maturity transformation risk in the banking sector and promoting funding stability. The revised package has been issued for public consultation with a plan of making the rule binding in 2018. This paper complements earlier quantitative impact studies by discussing the potential impact of introducing the NSFR based on empirical analysis of end-2012 financial data for over 2000 banks covering 128 countries. The calculations show that a sizeable percentage of the banks in most countries would meet the minimum NSFR prudential requirement at end-2012, and, further, that larger banks tend to be more vulnerable to the introduction of the NSFR. Additionally, by comparing the NSFR to other structural funding mismatch indicators, we find that the NSFR is a relatively consistent regulatory measure for capturing banks’ funding risk. Finally, the paper discusses key policy issues for consideration in implementing the NSFR.
Author: Mr.Lev Ratnovski Publisher: International Monetary Fund ISBN: 1455201812 Category : Business & Economics Languages : en Pages : 30
Book Description
Banks increasingly use short-term wholesale funds to supplement traditional retail deposits. Existing literature mainly points to the "bright side" of wholesale funding: sophisticated financiers can monitor banks, disciplining bad but refinancing good ones. This paper models a "dark side" of wholesale funding. In an environment with a costless but noisy public signal on bank project quality, short-term wholesale financiers have lower incentives to conduct costly monitoring, and instead may withdraw based on negative public signals, triggering inefficient liquidations. Comparative statics suggest that such distortions of incentives are smaller when public signals are less relevant and project liquidation costs are higher, e.g., when banks hold mostly relationship-based small business loans.
Author: Mr.Andre Santos Publisher: International Monetary Fund ISBN: 147551008X Category : Business & Economics Languages : en Pages : 43
Book Description
Staff Discussion Notes showcase the latest policy-related analysis and research being developed by individual IMF staff and are published to elicit comment and to further debate. These papers are generally brief and written in nontechnical language, and so are aimed at a broad audience interested in economic policy issues. This Web-only series replaced Staff Position Notes in January 2011.
Author: Malte Vieth Publisher: GRIN Verlag ISBN: 3656622779 Category : Business & Economics Languages : en Pages : 54
Book Description
Master's Thesis from the year 2013 in the subject Economics - Finance, grade: 1,7, Johannes Gutenberg University Mainz, language: English, abstract: In the year 2007 the first bad signs appeared which predicted that something is happening in global financial markets. An asset-bubble in the US housing market started to bust and that event had generated fatal consequences not only for the US, but also for the rest of the world. Several major peaks characterize the recent financial crisis, also named subprime crisis, such as the country default of Iceland (though subprime crisis was not the main cause) or the nationalization of the mortgage corporations Freddie Mac and Fannie Mae by the US government. Certainly, no one forgets the queues of people waiting outside the branches of the British bank Northern Rock to withdraw their savings from the bank as a result of rumors about liquidity problems of this institution. Some of the biggest Investment Banks in the world experienced serious difficulties with reference to their liquidity situation and were acquired by other banks. JPMorgan Chase bought the traditional US Investment Bank Bear Stearns and Bank of America merged with the US Investment Bank Merrill Lynch. Clearly, one of the most important events in the course of the subprime crisis was the collapse of the US Investment Bank Lehman Brothers which happened on 15th September 2008. Especially Investment Banks were hit hard by the subprime crisis and also the Investment Banking divisions of universal banks caused many issues for the whole institution. One of the main causes of the subprime crisis was identified: the Investment Banking business. The regulatory framework with reference to the banking supervisory failed in times of financial turmoil and needed to be reformed. In particular, the capital situation and liquidity profile of many banks were not adequate compared to the risks these banks were exposed to. Risks resulting from positions in the trading book (market-to-market) and risks resulting from offbalance sheet items which were not monitored by supervisory authorities needed to be emphasized. When the crisis hit, the capital requirements on the banking book were sufficiently deep to safeguard banks. The capital requirements on the trading book, however, were nowhere strong enough to absorb the losses (Dayal, 2011, p. 17). The new regulatory framework, namely Basel III, developed by the Basel Committee on Banking Supervisions which was finalized in 2011 focused on these risks.
Author: Allen N. Berger Publisher: Oxford University Press ISBN: 0199236615 Category : Business & Economics Languages : en Pages : 1033
Book Description
This handbook provides an overview and analysis of state-of-the-art research in banking written by researchers in the field. It includes abstract theory, empirical analysis, and practitioner and policy-related material.
Author: Daniel Hosp Publisher: GRIN Verlag ISBN: 3656325561 Category : Business & Economics Languages : en Pages : 57
Book Description
Bachelor Thesis from the year 2011 in the subject Business economics - Investment and Finance, grade: 1, University of Innsbruck (Banken und Finanzen), language: English, abstract: 1. Introduction On 6 September 2009 the Central Bank Governors and Heads of Supervision agreed on Basel III after the financial crisis proved that Basel II was not capable of preventing the global economy from such a crisis (BCBS, 2008). Basel III is the third version of the international regulatory framework for financial institutions published by the Basel Committee of Banking Supervision (BCBS) of the Bank for International Settlements (BIS) located in Basel, Switzerland (BIS, www.bis.org, 30.04.2011).... .... This bachelor thesis should provide some deeper information about the impacts of the new liquidity measures. The impact of the standards on economy, financial institutions and their business segments is presented, after a detailed explanation of them. Concluding a comprehensive evaluation of the new requirements is done. 2. Developments in Basel III 2.1. Increasing Capital Requirements 2.2. Liquidity Coverage Ratio 2.3. Net Stable Funding Ratio 2.4. Monitoring Tools and Application of Standards 3. Initial Situation of Banks Regarding Liquidity Requirements 3.1. Quantitative Impact Study of the BCBS 3.2. European Quantitative Impact Study of the CEBS 3.3. Comparison of Results 4. Economic Impacts of the New Liquidity Requirements 4.1. Benefits of the New Liquidity Requirements 4.2. Costs of the New Liquidity Requirements 4.3. Evaluation of the Results 5. Impact of the Liquidity Requirements on Banks and their Business Segments 5.1. Changed Market Conditions 5.2. Impact on the Profitability of Banks 5.3. Impact on Business Segments 5.4. Impact on Central Banks 5.5. Overall Impacts on Banks and Business Segments 6. Evaluating the Liquidity Rules of Basel III 6.1. Static Nature of the Liquidity Measures 6.2. Are Wrong Incentives the Actual Causer? 6.3. Introduction of Basel III in Various Countries 6.4. Additional Comments 7. Conclusion
Author: Michael R. King
Author: Michael R. King
Author: Jeanne Gobat
Author: 
Author: Mr.Lev Ratnovski
Author: Mr.Andre Santos
Author: 
Author: Malte Vieth
Author: Allen N. Berger
Author: Benjamin H. Cohen
Author: Daniel Hosp