Finadium’s Post

On July 27th, 2023 the US Federal Reserve and FDIC published their Notice for Proposed rulemaking for Basel III Endgame. The comment period, originally November 30, 2023, was extended to January 16, 2024 with final rule publication expected Q2/Q3 2024. Implementation of Basel III endgame would take effect July 1, 2025 with a three year phase-in of the capital ratio impact through June 30, 2028. Here's why we're advising our clients to start preparing for Basel III Endgame now👇

“Beyond revisions to the Basel III framework, the ministers have also called for climate and transition risks to be addressed in a more “realistic” way by promoting “a gradual transition for enterprises while ensuring a level playing field”. Specifically, they call for a review of the green asset ratio for financial institutions, a metric aimed at quantifying EU taxonomy-aligned assets as a percentage of total covered assets.”

💬 Should the EU ease its #banking #regulations, or is it time for the US to tighten theirs? 🌍 As France, Germany, and Italy urge the EU to reconsider Basel III rules, the global regulatory landscape is once again in the spotlight. 📊. ⚖️ With new challenges emerging globally, it's crucial to ask: are we getting the balance right? #BankingRegulation #FinancialStability #RiskManagement #Compliance #BankingInnovation #EU #USA #RegulatoryDebate #Finance #BankingTrends #Fintech #BankingIndustry #BaselIII #Finance #Banking #GlobalEconomy #BankingReform #Compliance

9.00am - 9.45am Regulation Panellists: Sean Tuffy, Jonathan Lee of Kaizen, Farrah Mahmood of International Securities Lending Association (ISLA), Kevin McNulty of EquiLend, Ed Oliver of eSecLending, Jonathan T. of S&P Global Market Intelligence In this session, panellists will take an in-depth look at the ever-shifting regulatory landscape, considering some of the key changes over the past year and how the industry will tackle the future. From the SFTR to the SEC’s 10c-1a SLATE, the line up of experts will consider the ramifications — both current and potential — on the securities finance sector. Coming just a week after the US election, the political backdrop looks set to add yet another dimension after a campaign which brought Basel Endgame and capitalisation requirements to the mainstream. Register here: https://lnkd.in/ekv7Yvc9

Regulators face dilemma on whether to finalise Basel III endgame before November presidential election, or repropose it after that date. https://hubs.li/Q02xfrBC0 Non-subscribers can get a snapshot of Risk’s coverage. Registration is free and allows you to read two articles a month: https://hubs.li/Q02xfvnZ0

The VSTOXX index measures market risk aversion in Europe. With key elections in coming days, what is the gauge saying about political risk? In an Asset TV interview, J.P. Morgan, Eurex and STOXX experts discuss the outlook and uses of volatility trading. Watch the video here: https://hubs.la/Q02DG_-w0 #VSTOXX #MarketRisk #Europe #outlook #volatility

Regulators face dilemma on whether to finalise Basel III endgame before November presidential election, or repropose it after that date. https://hubs.li/Q02xfv5g0 Non-subscribers can get a snapshot of Risk’s coverage. Registration is free and allows you to read two articles a month: https://hubs.li/Q02xfrSt0

Extreme values are something to look for in A/B tests. At Amazon we had extreme values that turned out to be libraries ordering hundreds of books in a single order. At Airbnb we had agencies booking hundreds of nights. Since they are creating bias, it is important to understand the source of such extreme values and address them (e.g., capping). This example isn't a big problem due to the small amount, but if the owner had ordered this 100 times, it would be. This claim below is likely an urban legend for several reasons: 1. To profit, he (I'm assuming male given the photo) needs to avoid baking the pizzas. What do you tell the delivery person? I'm pretty sure a fake pickup at your own place violates the terms of service. 2. He still needs to pay comission to doordash. 3. If I were running this A/B test as Doordash, I would discount by a portion of my comission, which is a more realistic setting then a massive 30%+ discount described here (30% off $240, which is already after commission)

9.00am - 9.45am Regulation Sean Tuffy moderates a panel of experts including Jonathan Lee of Kaizen, Farrah Mahmood of International Securities Lending Association (ISLA), Kevin McNulty of EquiLend, Ed Oliver of eSecLending and Jonathan T. of Cappitech from S&P Global Market Intelligence In this session, panellists will take an in-depth look at the ever-shifting regulatory landscape, considering some of the key changes over the past year and how the industry will tackle the future. From the SFTR to the SEC’s 10c-1a SLATE, the line up of experts will consider the ramifications — both current and potential — on the securities finance sector. Coming just a week after the US election, the political backdrop looks set to add yet another dimension after a campaign which brought Basel Endgame and capitalisation requirements to the mainstream. Register here... https://lnkd.in/en97EJKJ

The revised U.S. implementation of the Basel III Endgame NPR may be finalized relatively soon. It appears that regulators have decided to revise the original notice of proposed rulemaking (“NPR”) rather than scrap it and start from scratch. In any case, U.S. regulators are likely to hew to the minimum standards contained in the consensus Basel III Endgame negotiated among signatories. Those minimum standards curtailed banks’ ability to use internal models to determine counterparty risk weights, instead substituting standardized risk weights. As a result, RWAs for transactions with low-risk but unrated counterparties such as certain money market or UCITS funds could increase substantially. Guaranteed Repo eliminates banks’ exposures to end providers, alleviating the increased RWAs from facing such low-risk unrated counterparties. It also reduces costs and operational complexity, and is excluded from the [supplementary] leverage ratio. Finally, Guaranteed Repo transactions are excluded from the clearing requirement. These features make it the most efficient secured funding model. Please see Shiv Rao and SUNTHAY for more information on how Guaranteed Repo can support your global trading activity.