Letter from the Secretary General of the BCBS responding to ISDA letter of June 29 on the removal of the Available for Sale (AFS) filter to determine core regulatory capital and its interaction with the future accounting of AFS investment securities under U.S. GAAP and IFRS. The Secretary General states that the BCBS’s decision to remove the filter from Common Equity (CET 1) on unrealised gains/losses was based on the experiences of the financial crisis: that the practice of filtering out losses from Tier 1 capital undermined both the quality of regulatory capital and its credibility.