ISDA and IIF Respond to BCBS Consultation on CCR Management

On August 28, ISDA and the Institute of International Finance (IIF) submitted a joint response to the Basel Committee on Banking Supervision’s (BCBS) consultation on guidelines for counterparty credit risk (CCR) management. The new guidelines represent an update to the Sound Practices for Banks’ Interactions with Highly Leveraged Institutions, published in January 1999, to incorporate recent lessons and best practices. In the response, the associations stress the guidelines should be risk-based and proportional, considering a diverse universe of counterparties and financial markets across the world. The associations believe a common understanding and coordination between central banks, supervisors and banks can enhance the effectiveness of CCR practices. The response also highlights the importance of having flexible disclosure requirements based on the risk profile of different client segments, acknowledging that banks may encounter challenges in obtaining certain information from their counterparties. Finally, the response notes that proportionality is central to efficient regulation, and impractical measures and those with high implementation costs relative to their benefits should be removed to prevent an overly burdensome framework that could undermine the guidelines’ objectives

Documents (1) for ISDA and IIF Respond to BCBS Consultation on CCR Management

Maintaining Focus on Basel III Endgame Recalibration

In its original form, the US Basel III endgame proposal would have resulted in disproportionate increases in capital for trading book activities, forcing banks to make difficult choices about their participation in certain businesses. After two-and-a-half years, a revised proposal...

IRRBB Management in EMDEs

Interest rate risk in the banking book (IRRBB) has become a growing priority for banks and regulators in emerging market and developing economies (EMDEs). As many of these countries face monetary tightening cycles and ongoing macroeconomic volatility, bank balance sheets...

Response to CPMI-IOSCO on Consultation

On February 5, ISDA and FIA responded to the Committee on Payments and Market Infrastructures (CPMI) and International Organization of Securities Commissions (IOSCO) consultation on the management of general business risks and general business losses by financial market infrastructures (FMIs)....