The Basel Committee on Banking Supervision is said to have proposed new rules under which banks will be required to use standardized calculations, instead of their own, to size up their asset risks.
The move, which will limit banks’ leeway in measuring possible losses on everything from loans to interest rates to fraud, comes as part of the global panel’s efforts to finalize post-crisis capital rules, according to the Wall Street Journal.
Regulators are seeking to address weaknesses spotlighted by the 2008 financial crisis, including minimizing the variance in how banks weigh their own risk in three key areas: credit risk, market risk, and operational risk, the report said.
One proposal would stop banks from calculating their own exposure to other banks, large corporations and stockholdings.
Another imposes tougher capital requirements on swaps, bonds and other securities that banks plan to trade.
The moves reflect regulators’ frustration with varying loss estimates across banks, the Journal noted.
The 29-member Basel Committee includes representatives from the US, Germany, Netherlands, European Union and China.
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