May 14, 2024 (NO COMMENTS)

Changes to G-Sib charge could curb year-end repo volatility, but also cut balance sheet capacity


The debate around banks shrinking some of their higher-velocity assets at year-end to reduce their regulatory capital requirements has been going on so long, some national regulators have already decided to act on it. Now the Basel Committee on Banking Supervision is catching up. Proposed changes, which would specifically apply to global systemically important banks (G-Sibs), may improve year-end liquidity in short-dated instruments that are heavy on the balance sheet – especially repo markets