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Risk Management News Updates, February 2nd 2011

This week's risk management news includes FSS's plan to increase banking supervision in high-risk sectors, EBA's second round of stress tests, IMF's decision to conduct stress tests, and Kuwait Central Bank's risk assessment upgrade for banks

February 07, 2011 | Aditya Puri


Bank of England says new Basel III capital requirements insufficient
The Bank of England, in a recent discussion paper titled ‘Optimal bank capital, January 2011’, has found that the new Basel III capital requirements are insufficient. The central bank wants to double the amount that banks are required to hold, even if this requirement may hurt the country’s short-term economic growth.

The discussion paper can be accessed here.

CBRC planning to raise capital ratio when credit growth is excessive
The China Banking Regulatory Committee, the country’s financial regulator, may direct its biggest banks, including ICBC and China Construction Bank, to increase their capital ratios to as high as 14% when credit growth is in excess. The regulator’s newly-proposed rules may require these banks to raise their capital adequacy buffers by as much as 2.5% points when there is too much lending, up from the usual 11.5% ratio. CBRC is taking these steps as a measure to curb risks associated with excessive lending.

Kenya’s central bank reviewing risk guidelines
The Central Bank of Kenya is currently re-evaluating its prudential and risk management regulations to ensure they are relevant to current operating environments and include international best practices. This follows the launch of risk-based supervision for banks in the country, as well as the introduction of the agent-banking model, installation of a credit information sharing mechanism and licensing of deposit taking microfinance institutions

Re-disseminated by The Asian Banker

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Keywords:Bank Of England, CBRC, Central Bank Of Kenya