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8asel lll Randbook

2
!able of ConLenLs
!"#$%&' )
*+,-&' )
.,,%&/"+0"12' 3
4 520%16$70"12 8
9 :&;"2"0"12 1; 7+<"0+- +26 7+<"0+- ,$;;&%' 49
9=4 >&? 6&;"2"0"12 1; 7+<"0+- 4)
9=9 @1A<12&20' 1; 7+<"0+- 48
2.2.1 Connon EquiLy !ier 1 caiLal 48
2.2.2 AddiLional !ier 1 caiLal 4B
2.2.8 !ier 2 caiLal 4C
9=D E%$6&20"+- ;"-0&%' +26 6&6$70"12' 9F
2.8.1 PrudenLial filLers 9F
2.8.2 0educLions fron CE! 1 caiLal 94
2.8.8 ExenLions fron and alLernaLives Lo deducLion fron CE! 1 iLens 99
2.8.4 0educLions fron AddiLional !ier 1 caiLal 99
2.8.6 0educLions fron !ier 2 iLens 9D
9=) G"21%"0H "20&%&'0' 9)
2.4.1 MinoriLy inLeresLs LhaL qualify for inclusion in consolidaLed CE! 1 caiLal 9)
2.4.2 0ualifyinq AddiLional !ier 1, !ier 1, !ier 2 caiLal and qualifyinq own funds 9)
9=3 52'0"0$0"12+- 2&0?1%I' 9)
9=8 @+<"0+- ,$;;&%' 93
2..1 CaiLal conservaLion buffer 93
2..2 CounLercyclical caiLal buffer 93
9=J K2L+27&6 6"'7-1'$%& %&M$"%&A&20' 93
D @1$20&%<+%0H @%&6"0 N"'I 98
D=4 K;;&70"/& KO<&70&6 E1'"0"/& KO<1'$%& 9B
D=9 @%&6"0 /+-$+0"12 +6P$'0A&20 9B
D=D Q%12# ?+H %"'I 9C
D=) .''&0 /+-$& 71%%&-+0"12 9C
D=3 @&20%+- 71$20&%<+%0"&' 9C
D=8 K2L+27&6 @@N A+2+#&A&20 %&M$"%&A&20' 9C
8
) R&/&%+#& %+0"1 DF
)=4 :&;"2"0"12 +26 7+-",%+0"12 D9
3 S-1,+- -"M$"6"0H '0+26+%6 D)
3=4 R"M$"6"0H @1/&%+#& N+0"1 DJ
6.1.1. 0efiniLion of hiqh qualiLy liquid asseLs DB
6.1.2. 0efiniLion of neL liquidiLy ouLflows )F
3=9 >&0 T0+,-& !$26"2# N+0"1 )9
3=D G12"01%"2# 011-' )3
3=) 52'0"0$0"12+- 2&0?1%I' )3
8 K2L+27&6 #1/&%2+27& +26 '+270"12' )8
8=4 K2L+27&6 #1/&%2+27& )B
8=9 T+270"12' )B
J U0L&% 01<"7' 3F
J=4 TH'0&A"7+--H 5A<1%0+20 !"2+27"+- 52'0"0$0"12' 39
J=9 U/&%%&-"+27& 12 &O0&%2+- %+0"2#' 3D
J=D TA+-- +26 G&6"$AVT"W&6 K20"0H 3D
J=) X+'&- 5 -"A"0 3D
B @127-$'"12 3)
X",-"1#%+<LH 3J
.<<&26"O 3B
4
!"#$%& 4Y !%1A X+'&- 9=3 01 X+'&- 555 C
!"#$%& 9Y @+<"0+- %&M$"%&A&20' X+'&- 55ZX+'&- 9=3 /'= X+'&- 555 43
!"#$%& DY EL+'&V"2 +%%+2#&A&20' X+'&- 555 7+<"0+- %&M$"%&A&20' 43
!"#$%& )Y R&/&%+#& N+0"1 ?"0L"2 X+'&- 555 D9
!"#$%& 3Y R"M$"6"0H %"'I A+2+#&A&20 [RNG\ ;%+A&?1%I D8
!"#$%& 8Y R"M$"6"0H @1/&%+#& N+0"1 DJ
!"#$%& JY R@NY ]"#L M$+-"0H -"M$"6 +''&0' DC
!"#$%& BY R@NY >&0 -"M$"6"0H 1$0;-1?' )F
!"#$%& CY R@NY ]"#L M$+-"0H -"M$"6 +''&0' +26 2&0 -"M$"6"0H 1$0;-1?' )4
!"#$%& 4FY >&0 T0+,-& !$26"2# N+0"1 )D
!"#$%& 44Y >T!NY ./+"-+,-& '0+,-& ;$26"2# )D
!"#$%& 49Y >T!NY N&M$"%&6 '0+,-& ;$26"2# ))
!"#$%& 4DY .^@Y N"'IVQ&"#L0' ;1% -+%#& ;"2+27"+- "2'0"0$0"12' _ X+'&- 55 /'= X+'&- 555 8F
*+,-& 4Y !-&O","-"0H 1; A&A,&% '0+0&' ?"0L"2 0L& '"2#-& %$-& ,11I 4F
*+,-& 9Y E%$6&20"+- ;"-0&%' X+'&- 555 9F
*+,-& DY :&6$70"12 ;%1A @K* 4 7+<"0+- "2 X+'&- 555 94
*+,-& )Y :&6$70"12 ;%1A .66"0"12+- *"&% 4 7+<"0+- "2 X+'&- 555 99
*+,-& 3Y :&6$70"12' ;%1A .66"0"12+- *"&% 9 7+<"0+- "2 X+'&- 555 9D
*+,-& 8Y U<0"12' 12 71%<1%+0& #1/&%2+27& )C
*+,-& JY X+'&- 555 T$AA+%H *+,-& 3B
*+,-& BY .^@Y N"'IVQ&"#L0' ;1% -+%#& ;"2+27"+- "2'0"0$0"12' _ X+'&- 55 /'= X+'&- 555 8F
*+,-& CY 526"7+01%V,+'&6 A&+'$%&A&20 +<<%1+7L SVT5XT 84
*+,-& 4FY .27"--+%H "26"7+01%' ;1% +''&''A&20 SVT5XT 84
Fiqures
!ables
6
.T! ./+"-+,-& T0+,-& !$26"2#
X@XT X+'&- @1AA"00&& 12 X+2I"2# T$<&%/"'"12
@5` @1--&70"/& 52/&'0A&20 `26&%0+I"2#
@@E @&20%+- @1$20&%<+%0H
@@N @1$20&%<+%0H @%&6"0 N"'I
@KG @$%%&20 KO<1'$%& G&0L16
@K*4 @1AA12 KM$"0H *"&% 4
@N: @+<"0+- N&M$"%&A&20' :"%&70"/&
@^. @%&6"0 ^+-$+0"12 .6P$'0A&20
KX. K$%1<&+2 X+2I"2# .$0L1%"0H
KEK KO<&70&6 E1'"0"/& KO<1'$%&
!TX !"2+27"+- T0+,"-"0H X1+%6
!a !"2+27"+- a&+%
SVT5X' S-1,+- TH'0&A"7+--H 5A<1%0+20 X+2I'
5GG 520&%2+- G16&- G&0L16
R@N R"M$"6"0H @1/&%+#& N+0"1
G:. G+O"A$A :"'0%",$0+,-& .A1$20
>T!N >&0 T0+,-& !$26"2# N+0"1
U*@ U/&%V0L&V@1$20&%
E: E%1,+,"-"0H 1; :&;+$-0
ETK E$,-"7 T&701% K20"0H
NT! N&M$"%&6 T0+,-& !$26"2#
NQ N"'IVQ&"#L0
T5X' TH'0&A"7+--H 5A<1%0+20 X+2I'
T5!5' TH'0&A"7+--H 5A<1%0+20 !"2+27"+- 52'0"0$0"12'
TG T0+26+%6"W&6 G&0L16
TGK TA+-- +26 G&6"$AVT"W& K20"0H
TTEK T&7$%"0"W+0"12 T<&7"+- E$%<1'& K20"0H
^+N ^+-$&V+0VN"'I
AbbreviaLions
1
lnLroducLion

7
8asel lll addresses Lhis, wiLh Lhe qoal
of inrovinq Lhe bankinq secLor's
abiliLy Lo absorb shocks arisinq fron
financial and econonic sLress. ln
0ecenber 2010 Lhe 8asel ConniLLee
on 8ankinq Suervision (8C8S}
ublished Lhe 8asel lll docunenLs
"!"#$% '''( ) *%+,"% -$*.%"/+-0
1-"2$3+-4 1+- 2+-$ -$#5%5$6/ ,"64# "67
,"6456* #0#/$2#" (a revised version
was ublished in June 2011} and "!"#$%
'''( '6/$-6"/5+6"% 1-"2$3+-4 1+- %58.575/0
-5#4 2$"#.-$2$6/9 #/"67"-7# "67
2+65/+-56*."
WiLh Lhis reforn ackaqe, Lhe 8C8S
ains Lo inrove risk nanaqenenL
and qovernance as well as sLrenqLhen
banks' Lransarency and disclosure.
8asel lll is also desiqned Lo sLrenqLhen
Lhe resoluLion of sysLenically
siqnificanL cross-border banks.
lL covers rinarily Lhe followinq
asecLs
1
:
:&;"2"0"12 1; 7+<"0+-
lnLroducLion of a new definiLion
of caiLal Lo increase Lhe qualiLy,
consisLency and Lransarency of
Lhe caiLal base. As Lhe recenL crisis
denonsLraLed LhaL crediL losses and
wriLe-downs cone ouL of reLained
earninqs, which is arL of banks'
Lanqible connon equiLy base, under
8asel lll connon equiLy (i.e., connon
shares and reLained earninqs} nusL be
Lhe redoninanL forn of !ier 1 caiLal.
FurLher, Lhe reforn ackaqe renoves
Lhe exisLinq inconsisLency in Lhe
definiLion of caiLal by harnonizinq
deducLions of caiLal and by increasinq
Lransarency Lhrouqh disclosure
requirenenLs.
K2L+27&6 %"'I 71/&%+#&Z
@1$20&%<+%0H @%&6"0 N"'I
!he reforns Lo Lhe 8asel ll franework
by Lhe 8C8S in 2000 and Lhe
anendnenLs nade in Lhe Euroean
CaiLal PequirenenLs 0irecLive
lll (CP0 lll}
2
increased caiLal
requirenenLs for Lhe Lradinq book
and conlex securiLizaLion osiLions
and inLroduced sLressed value-aL-risk
caiLal requirenenLs and hiqher caiLal
requirenenLs for re-securiLizaLions
for boLh in Lhe bankinq and Lradinq
book. 8asel lll now adds Lhe followinq
reforns: calculaLion of Lhe caiLal
requirenenLs for counLerarLy crediL
risk (CCP} based on sLressed inuLs;
inLroducLion of a caiLal charqe for
oLenLial nark-Lo-narkeL losses (i.e.,
crediL valuaLion risk}; sLrenqLheninq
sLandards for collaLeral nanaqenenL
and iniLial narqininq; hiqher caiLal
requirenenLs for 0!C derivaLives
exosures; raisinq CCP nanaqenenL
sLandards.
PecenL financial crises have denonsLraLed nunerous
weaknesses in Lhe qlobal requlaLory franework and
in banks' risk nanaqenenL racLices. ln resonse,
requlaLory auLhoriLies have considered various neasures
Lo increase Lhe sLabiliLy of Lhe financial narkeLs and
revenL fuLure neqaLive inacL on Lhe econony. 0ne
na|or focus is on sLrenqLheninq qlobal caiLal and
liquidiLy rules.
8
!"#$%& 4Y !%1A X+'&- 9=3 01 X+'&- 555
Source: AccenLure
R&/&%+#& %+0"1
lnLroducLion of a leveraqe raLio as
a sulenenLary neasure Lo Lhe
risk-based franework of 8asel ll. !he
ob|ecLive is Lo consLrain Lhe build-u
of leveraqe and avoid desLabilizinq
deleveraqinq rocesses.
N&6$7"2# <%17H7-"7+-"0H +26
<%1A10"2# 71$20&%7H7-"7+- ,$;;&%'
lnLroducLion of neasures Lo nake
banks nore resilienL Lo rocyclical
dynanics and avoid Lhe desLabilizinq
effecLs exerienced in Lhe lasL crisis.
!he nain ob|ecLives of Lhese neasures
are: danen any excess cyclicaliLy
of Lhe nininun caiLal requirenenL;
ronoLe nore forward-lookinq
rovisions; conserve caiLal Lo build
buffers aL individual banks and in
Lhe bankinq secLor LhaL can be used
in eriods of sLress LesLinq; achieve
Lhe broader nacro-rudenLial qoal of
roLecLinq Lhe bankinq secLor fron
eriods of excess crediL qrowLh.
S-1,+- -"M$"6"0H '0+26+%6
A new liquidiLy sLandard is inLroduced
Lo achieve Lwo ob|ecLives. !he firsL
ob|ecLive, ursued by Lhe LiquidiLy
Coveraqe PaLio (LCP}, is Lo ronoLe
shorL-Lern resilience of a bank's
liquidiLy risk rofile by ensurinq LhaL
iL has sufficienL hiqh qualiLy liquid
asseLs Lo survive a sLress scenario
lasLinq one nonLh. !he second
ob|ecLive is Lo ronoLe resilience over
Lhe lonqer Lern by creaLinq addiLional
incenLives for a bank Lo fund iLs
acLiviLies wiLh nore sLable sources
of fundinq. !he heL SLable Fundinq
PaLio (hSFP}, wiLh a Line horizon of
one year, should rovide a susLainable
naLuriLy sLrucLure of asseLs and
liabiliLies. 8asel lll also inLroduces a
connon seL of noniLorinq Lools. !he
new requirenenLs conlenenL Lhe
"Princiles for Sound LiquidiLy Pisk
ManaqenenL and Suervision"
8
which
are included in Lhe CP0 ll.
4
!he CP0
ll requirenenLs, inlenenLed inLo
naLional law by Lhe Eb Menber SLaLes,
becane effecLive 0ecenber 81, 2010.
!his handbook rovides a deLailed
overview of Lhe na|or chanqes of
8asel lll corresondinq Lo Lhe Eb rules.
lL focuses on asecLs relaLed Lo banks.
AnendnenLs reqardinq suervisory
auLhoriLies in Lhe conLexL of enhanced
suervision are noL covered in deLail.
!he sLaLus of Loics currenLly under
discussion is included here, as are
differences beLween Lhe Eb rules
and Lhe 8asel lll docunenLs fron
Lhe 8C8S.
!he enhancenenLs of Lhe caiLal
franework wiLhin "8asel 2.6" (CP0
ll and CP0 lll in Lhe Eb}, which are
already in force or becone alicable
beqinninq in 2012 are noL wiLhin
Lhe scoe of Lhis nanual. hor are
Lhe challenqes banks face wiLh
Lhe inlenenLaLion of Lhe 8asel lll
requirenenLs.
6

bX+'&- 9=3c bX+'&- 555c
R&#+- ,+'"' [K`\ CP0 (2000j111j
EC} ublished in Lhe
0fficial Journal (hov.
2000} (CP0 ll}
CP0 (2010j7j
Eb} ublished in Lhe
0fficial Journal (0ec.
2010} (CP0 lll}
"CP0 lv" (ackaqe of Lwo leqal insLrunenLs: direcLive
and requlaLion}
T0+0$'
K$%1<&+2Z
2+0"12+-
"A<-&A&20+0"12
!ransosed inLo
naLional law
ParLially
Lransosed inLo
naLional law
"8asel lll" ublished by Lhe 8C8S in 0ec. 2010 (rev.
version of caiLal franework June 2011}
0irecLive and PequlaLion ublished by Lhe Euroean
Connission in July 2011; discussed by ParlianenL and
Council in auLunn 2011jbeqinninq of 2012
0irecLive: Lo be LranslaLed inLo naLional law Lill 0ec.
81, 2012; PequlaLion: no naLional LranslaLion required
@1A"2# "201
;1%7&
0ec. 81, 2010 0ec. 81, 2011 Jan. 1, 2018 (wiLh LransiLion eriods Lill 2010}
*1<"7' Larqe exosures
SecuriLizaLion
Rybrid caiLal
insLrunenLs
LiquidiLy risk
nanaqenenL
Cross border
suervision
Pe-securiLizaLion
0isclosure
securiLizaLion risks
!radinq book
PenuneraLion
olicies
N&#$-+0"12
0efiniLion of caiLal
LiquidiLy risk
CounLerarLy crediL risk
Leveraqe raLio
Sinqle rule book
(Lhrouqh PequlaLion}
: " %&70 " / &
CaiLal buffers
Enhanced qovernance
SancLions
Enhanced suervision
0
*H<& 1; G&+'$%& @1A<+0",-& ?"0L T"2#-& N$-&
X11Id
K` G+7%1V<%$6&20"+- G&+'$%&'
E"--+% 4
0oes noL reclude Lhe neasure
beinq secifically LarqeLed Lo cerLain
reqional exosures
Power for Lhe Connission Lo LiqhLen
Lhe requirenenLs Lenorarily across
Lhe board for secific acLiviLies and
exosures. Secial urqency rocedure
is ossible for swifL resonse Lo
nacro-rudenLial develonenLs.
Measure is enbedded in Lhe Sinqle
Pule 8ook. lL unifornly alies Lo all
insLiLuLions across Euroe LhaL have
Lhe Lye of exosure concerned.
>+0"12+- G&+'$%&'
CaiLal requirenenLs for real esLaLe
lendinq
Secial rocedure in Lhe PequlaLion
under which Menber SLaLes can boLh
raise caiLal requirenenLs and LiqhLen
loan-Lo-value liniLs for loans secured
by connercial andjor residenLial
roerLy.
Measure is enbedded in Lhe Sinqle
Pule 8ook. !he requirenenLs seL by
counLry A aly also Lo insLiLuLions in
counLry 8 LhaL do business in A.
CounLercyclical buffer Menber SLaLes can seL an addiLional
buffer requirenenL Lo danen excess
lendinq qrowLh nore qenerally. !his is
Lo roLecL Lhe econonyjbankinq secLor
fron any oLher sLrucLural variables
and fron Lhe exosure of Lhe bankinq
secLor Lo risk facLors relaLed Lo
financial sLabiliLy.
Measure is enbedded in Lhe Sinqle
Pule 8ook. !he requirenenLs seL by
counLry A aly also Lo insLiLuLions in
counLry 8 LhaL do business in A. !his
"recirociLy" is nandaLory only u Lo
2.6%.
E"--+% 9
"Pillar 2" neasures haLional suervisors can inose a
wide ranqe of neasures, includinq
addiLional caiLal requirenenLs, on
individual insLiLuLions or qrous of
insLiLuLions Lo address hiqher-Lhan-
nornal risk.
Measures are included in Lhe 0irecLive.
!hey nusL be |usLified in Lerns of
arLicular risks of a qiven insLiLuLion
or qrou of insLiLuLions, includinq risks
erLaininq Lo a arLicular reqion or
secLor. FurLher converqence of such
neasures will be souqhL over Line.
*+,-& 4Y !-&O","-"0H 1; G&A,&% T0+0&' ?"0L"2 0L& '"2#-& %$-& ,11I
Source: CP0 lv - FrequenLly Asked quesLions (July 2011}, Euroean Connission found aL EbP0PA - Press Peleases - CP0 lv - FrequenLly Asked 0uesLions
8asel ll and Lhe reforn ackaqes of
"8asel 2.6" are inlenenLed Lhrouqh
direcLives in Lhe Eb (CP0, CP0 ll,
CP0 lll}. !haL is, Lhe rules need Lo
be Lransosed inLo naLional law
wiLh several oLions and discreLions
aL Lhe naLional level. 8asel lll is
inLroduced Lhrouqh Lwo differenL
leqal insLrunenLs.

MosL of Lhe key


Loics, such as Lhe new definiLion of
caiLal and Lhe new liquidiLy raLios,
are inlenenLed Lhrouqh a PequlaLion
(a direcLly alicable leqal acL, wiLh
no furLher naLional inlenenLaLion
needed}. !he ob|ecLive is Lo creaLe a
level layinq field (sinqle rule book}.
0Lher asecLs, includinq caiLal
buffers and enhanced qovernance,
are inlenenLed Lhrouqh a 0irecLive.
Followinq Lhe Euroean leqislaLive
rocess, Lhe nexL sLe is for Lhe leqal
docunenLs ublished by Lhe Euroean
Connission (Lhe roosed PequlaLions
and 0irecLives} Lo be discussed wiLhin
Lhe Euroean ParlianenL and Council.
0esiLe Lhe sinqle rule book, Menber
SLaLes will reLain sone flexibiliLy in
secific areas which are sunnarized
in !able 1:
10
11
2
0efiniLion of caiLal and
caiLal buffers
12
18
14
!he financial crisis showed LhaL noL
all insLiLuLions did hold sufficienL
caiLal and LhaL Lhe caiLal was
soneLines of oor qualiLy and noL
available Lo absorb losses as Lhey
naLerialized. 8asel lll inLroduces
- based on Lhe anendnenLs nade
under Lhe CP0 ll wiLh reqard Lo hybrid
caiLal insLrunenLs - a new definiLion
of caiLal Lo increase Lhe qualiLy,
consisLency and Lransarency of Lhe
caiLal base. lL also requires hiqher
caiLal raLios. Key elenenLs of Lhe
revision include
7
:
Paise qualiLy and quanLiLy of !ier 1
caiLal;
SinlificaLion and reducLion of !ier
2 caiLal;
ElininaLion of !ier 8 caiLal;
More sLrinqenL criLeria for each
insLrunenL;
RarnonizaLion of requlaLory
ad|usLnenLs;
Enhanced disclosure requirenenLs;
lnLroducLion of a new liniL sysLen
for Lhe caiLal elenenLs.
Accordinq Lo Lhe new definiLion,
caiLal conrises Lhe followinq
elenenLs:
6oinq-concern caiLal (!ier 1
caiLal};
- Connon EquiLy !ier 1 caiLal (CE! 1
caiLal}: Connon equiLy (i.e., connon
shares and reLained earninqs} nusL be
Lhe redoninanL forn of !ier 1 caiLal
- AddiLional !ier 1 caiLal
6one-concern caiLal (!ier 2 caiLal}.
While qoinq-concern caiLal (!ier
1} should allow an insLiLuLion Lo
conLinue iLs acLiviLies and hel revenL
insolvency, qone-concern caiLal (!ier
2} would hel ensure LhaL deosiLors
and senior crediLors can be reaid if
Lhe insLiLuLion fails.
!he own funds requirenenLs under
8asel lll are Lhe followinq (as a
ercenLaqe of risk-weiqhLed asseLs,
PWA}:
CE! 1 caiLal raLio of 4.6%;
!ier 1 caiLal raLio of %;
!oLal caiLal raLio of 8%.
!oLal caiLal raLio will renain 8% of
PWA. CE! 1 caiLal raLio increases
fron 2% Lo 4.6%. AddiLional !ier 1
caiLal raLio is 1.6%, leadinq Lo a !ier
1 caiLal raLio of %. !he inorLance
of !ier 2 caiLal decreases by reducinq
Lhe raLio Lo 2% of PWA.
AarL fron Lhese chanqes, 8asel lll
will inLroduce Lwo new caiLal buffers:
a caiLal conservaLion buffer of
2.6% and a counLercyclical buffer of
0-2.6% deendinq on nacroecononic
circunsLances (see secLion 2. for a
deLailed descriLion of Lhe buffers}. For
boLh buffers, an exLra cushion of CE!
1 caiLal needs Lo be held leadinq Lo a
CE! 1 caiLal raLio of u Lo 0.6%.
AddiLional caiLal surcharqes beLween
1% and 2.6% (exLra cushion of CE!
1 caiLal} for sysLenically inorLanL
financial insLiLuLions (SlFls} -
deendinq on Lhe sysLenic inorLance
of Lhe insLiLuLion - are currenLly in
discussion.
0n Lo of Lhese own funds
requirenenLs, suervisory auLhoriLies
nay require exLra caiLal Lo cover
oLher risks followinq Pillar 2 (as iL is
also under Lhe currenL franework}.
8asel lll foresees a LransiLion eriod
before Lhe new caiLal requirenenLs
aly in full. !he qoinq concern
(!ier 1} caiLal requirenenLs will
be inlenenLed qradually beLween
2018 and 2016; Lhe caiLal buffers
beLween 201 and 2010. !he new
rudenLial ad|usLnenLs will be
inLroduced qradually, 20% a year
fron 2014, reachinq 100% in 2018.
6randfaLherinq rovisions over 10
years would also aly Lo caiLal
insLrunenLs LhaL are currenLly used
buL do noL neeL Lhe new rules. !hey
are hased ouL over a 10-year eriod
beqinninq in 2018 (10% a year}. While
Lhe roosals of Lhe 8C8S require LhaL
Lhese insLrunenLs were issued rior
Lo Lhe daLe of aqreenenL of Lhe new
rules by 8asel (SeLenber 12, 2010},
insLrunenLs issued afLer Lhis cuL off
daLe would need Lo conly wiLh Lhe
new rules or would noL be recoqnized
as caiLal as of January 1, 2018. !he
roosals of Lhe Eb PequlaLion seL Lhe
cuL off daLe "as Lhe daLe of adoLion
of Lhe roosal by Lhe Connission,
when Lhe Connission as a Colleqe
aqreed Lo leqally inlenenL 8asel
lll in Lhe Eb. SeLLinq a cuL off daLe
rior Lo Lhis olicy decision would
neiLher be leqiLinaLe nor leqally
sound, as iL would aly Lhe new rules
reLroacLively."
8
!he laLesL roosals fron Lhe 8C8S
follow a rinciles-based aroach
in reqard Lo caiLal, wiLh Lhe focus
on Lhe subsLance of Lhe caiLal
insLrunenLs. !hey also ensure LhaL Lhe
new rules are caable of beinq alied
Lo Lhe hiqhesL-qualiLy caiLal iLens
of non-|oinL sLock conanies, such as
cooeraLive banks. !hrouqh a seL of
rinciles, Lhe Eb sLandard secifies
in qreaLer deLail Lhe alicaLion
of Lhe new definiLion of caiLal Lo
insLrunenLs issued by non-|oinL
sLock conanies Lo ensure Lhey hold
conarable levels of hiqh qualiLy !ier
1 caiLal. Like Lhe 8C8S roosals,
iL inoses 14 sLricL criLeria LhaL
insLrunenLs need Lo neeL.
2.1 hew definiLion of caiLal
!"#$%& 9Y @+<"0+- %&M$"%&A&20' X+'&- 55ZX+'&- 9=3 /'= X+'&- 555
!"#$%& DY EL+'&V"2 +%%+2#&A&20' X+'&- 555 7+<"0+- %&M$"%&A&20'
Source: AccenLure, based on 8asel lll - LeiLfaden zu den neuen EiqenkaiLal- und LiquidiLiLLsreqeln fr 8anken (2011}, 8undesbank and CP0 lv - FrequenLly Asked 0uesLions
(2011}, Euroean Connission.
hoLe: !he LreaLnenL of hybrid caiLal insLrunenLs was anended wiLhin Lhe CP0 ll (harnonizaLion of Lhe eliqibiliLy criLeria and liniLs of hybrid caiLal insLrunenLs}; furLher
anendnenLs follow wiLhin 8asel lll.
Source: hew roosals on caiLal requirenenLs (July 2011}, Euroean Connission.
!"#
!$#
!%#
&'() % +,-'.,/0
1,23 !44# 56
&'() ! +,-'.,/
758() &'() % +,-'.,/0
1,23 94# &'() ! +,-'.,/
:;<= +,-'.,/ =>)+?,)@(
A'B C'=+>=='5BD
E5>B.()+F+/'+,/ +,-'.,/ G>66()0
(2.), +>=?'5B 56 EH& !
E,-'.,/ +5B=()I,.'5B G>66()0
(2.), +>=?'5B 56 EH& !
&5.,/ +,-'.,/
J--() &'() % +,-'.,/
K,23 94# 56 &'() ! +,-'.,/ 'BB5I,.'I(
?FG)'C +,-'.,/ 1,23 !9# 56 &'() ! +,-'.,/
!"#$% %%'!"#$% ()* !"#$% +++
&'() ! +,-'.,/
&'() L +,-'.,/
!4#
M#
"#
$#
%#
4#
EH& ! +,-'.,/ A+().,'B &'() ! '.(1=D
&'() % +,-'.,/
E,-'.,/ +5B=()I,.'5B G>66()
E5>B.()+F+/'+,/ +,-'.,/ G>66() A4N%39#D
OCC'.'5B,/ &'() ! +,-'.,/ A?FG)'C +,-'.,/D
&'() L +,-'.,/
:;<= =>)+?,)@( A'B C'=+>=='5B !N%39#D
16
!"#
!$#
!%#
&#
'#
"#
$#
%#
()* ! ,-./0-1
(-./0-1 ,234567-0/23 89::56
*/56 $ ,-./0-1
(293056,;,1/,-1 ,-./0-1 89::56
<==/0/23-1 */56 ! ,-./0-1
$>%#
$>%#
">%#
!"#$% '()'
?>@#
!>%#
?>@#
'()*
">%#
!>@#
$>@#
'()+
">@#
!>@#
$>%#
'(),
">@#
!>@#
$>%#
%>'$@#
%>'$@#
'()-
">@#
!>@#
$>%#
!>$@#
!>$@#
'().
">@#
!>@#
$>%#
!>&A@#
!>&A@#
'()/
">@#
!>@#
$>%#
$>@#
$>@#
0123 '()4
1
9=9=4 @1AA12 KM$"0H
*"&% 4 7+<"0+-
. I&H +'<&70 1; 0L& '0%"70&% 6&;"2"0"12
1; 7+<"0+- "' 0L+0 @1AA12 KM$"0H
*"&% 4 [@K* 4\ "2'0%$A&20' _ A+"2-H
71AA12 'L+%&' [1% 71A<+%+,-&
"2'0%$A&20'\ +26 %&0+"2&6 &+%2"2#'
_ A$'0 ,& 0L& <%&61A"2+20 ;1%A
1; *"&% 4 7+<"0+-= .771%6"2# 01 0L&
<%1<1'&6 K` N&#$-+0"12e @K* 4 "0&A'
712'"'0 1; 0L& ;1--1?"2#Y
C

+\ CaiLal insLrunenLs, rovided Lhe
condiLions laid down in ArLicle 2 of
Lhe roosed Eb PequlaLion are neL;
,\ Share reniun accounLs relaLed Lo
Lhe insLrunenLs referred Lo in oinL a;
7\ PeLained earninqs;
6\ AccunulaLed oLher conrehensive
incone;
&\ 0Lher reserves;
;\ Funds for qeneral bankinq risk.
@K* 4 "0&A' 1; A$0$+-'e 711<&%+0"/&
'17"&0"&' 1% '"A"-+% "2'0"0$0"12'
"27-$6& 7+<"0+- "2'0%$A&20' ,H +2
"2'0"0$0"12 $26&% "0' '0+0$01%H 0&%A'
<%1/"6&6 0L& ;1--1?"2# 7126"0"12' +%&
A&0Y
+\ !he insLiLuLion is of a Lye LhaL
is defined under alicable naLional
law and which coneLenL auLhoriLies
consider Lo qualify as a nuLual,
cooeraLive socieLy or a sinilar
insLiLuLion;
,\ !he condiLions laid down in
ArLicles 2 and 27 of Lhe roosed Eb
PequlaLion are neL;
7\ !he insLrunenL does noL ossess
feaLures LhaL could cause Lhe
condiLion of Lhe insLiLuLion Lo be
weakened as a qoinq concern durinq
eriods of narkeL sLress.
!he Euroean 8ankinq AuLhoriLy
(E8A} has Lhe nandaLe Lo develo
drafL requlaLory Lechnical sLandards
Lo secify Lhe oinLs reviously
nenLioned. !hese include feaLures
LhaL could cause Lhe condiLion of an
insLiLuLion Lo be weakened as a qoinq
concern durinq eriods of narkeL
sLress.
Accordinq Lo ArLicle 2 of Lhe
roosed Eb PequlaLion, caiLal
insLrunenLs need Lo neeL all of Lhe
followinq condiLions Lo qualify as
CE! 1 iLens:
10

+\ !he insLrunenLs are issued
direcLly by Lhe insLiLuLion wiLh Lhe
rior aroval of Lhe owners of
Lhe insLiLuLion or, where erniLLed
under alicable naLional law, Lhe
nanaqenenL body of Lhe insLiLuLion;
,\ !he insLrunenLs are aid u and
Lheir urchase is noL funded direcLly or
indirecLly by Lhe insLiLuLion;
7\ !he insLrunenLs neeL all Lhe
followinq condiLions as reqards Lheir
classificaLion:
"\ !hey qualify as caiLal wiLhin Lhe
neaninq of ArLicle 22 of 0irecLive
8j86jEEC;
""\ !hey are classified as equiLy
wiLhin Lhe neaninq of Lhe alicable
accounLinq sLandard;
"""\ !hey are classified as equiLy caiLal
for Lhe uroses of deLernininq
balance sheeL insolvency, where
alicable under naLional insolvency
law;
6\ !he insLrunenLs are clearly and
searaLely disclosed on Lhe balance
sheeL in Lhe financial sLaLenenLs of
Lhe insLiLuLion;
&\ !he insLrunenLs are ereLual;
;\ !he rincial anounL of Lhe
insLrunenLs nay noL be reduced
or reaid, exceL in eiLher of Lhe
followinq cases:
"\ !he liquidaLion of Lhe insLiLuLion;
""\ 0iscreLionary reurchases of Lhe
insLrunenLs or oLher discreLionary
neans of reducinq caiLal, where
Lhe insLiLuLion has received Lhe rior
consenL of Lhe coneLenL auLhoriLy
in accordance wiLh ArLicle 72 of Lhe
roosed Eb PequlaLion;
#\ !he rovisions qoverninq Lhe
insLrunenLs do noL indicaLe exressly
or inliciLly LhaL Lhe rincial anounL
of Lhe insLrunenLs would or niqhL
be reduced or reaid oLher Lhan in
Lhe liquidaLion of Lhe insLiLuLion, and
Lhe insLiLuLion does noL oLherwise
rovide such an indicaLion rior Lo or
aL issuance of Lhe insLrunenLs, exceL
in Lhe case of insLrunenLs referred
Lo in ArLicle 26 of Lhe roosed Eb
PequlaLion, where Lhe refusal by Lhe
insLiLuLion Lo redeen such insLrunenLs
is rohibiLed under alicable
naLional law;
L\ !he insLrunenLs neeL Lhe followinq
condiLions as reqards disLribuLions:
"\ !here are no referenLial
disLribuLions, includinq in relaLion
Lo oLher Connon EquiLy !ier 1
insLrunenLs, and Lhe Lerns qoverninq
Lhe insLrunenLs do noL rovide
referenLial riqhLs Lo aynenL of
disLribuLions;
""\ 0isLribuLions Lo holders of Lhe
insLrunenLs nay be aid only ouL of
disLribuLable iLens;
"""\ !he condiLions qoverninq Lhe
insLrunenLs do noL include a ca or
oLher resLricLion on Lhe naxinun level
of disLribuLions, exceL in Lhe case
of Lhe insLrunenLs referred Lo in
ArLicle 26 of Lhe roosed Eb
PequlaLion;
2.2 CononenLs of caiLal
17
"/\ !he level of disLribuLions is noL
deLernined on Lhe basis of Lhe anounL
for which Lhe insLrunenLs were
urchased aL issuance, and is noL
oLherwise deLernined on Lhis basis,
exceL in Lhe case of Lhe insLrunenLs
referred Lo in ArLicle 26 of Lhe
roosed Eb PequlaLion;
/\ !he condiLions qoverninq Lhe
insLrunenLs do noL include any
obliqaLion for Lhe insLiLuLion Lo nake
disLribuLions Lo Lheir holders and Lhe
insLiLuLion is noL oLherwise sub|ecL Lo
such an obliqaLion;
/"\ hon-aynenL of disLribuLions does
noL consLiLuLe an evenL of defaulL of
Lhe insLiLuLion;
"\ Conared Lo all Lhe caiLal
insLrunenLs issued by Lhe insLiLuLion,
Lhe insLrunenLs absorb Lhe firsL
and roorLionaLely qreaLesL share
of losses as Lhey occur, and each
insLrunenL absorbs losses Lo Lhe sane
deqree as all oLher Connon EquiLy !ier
1 insLrunenLs;
P\ !he insLrunenLs rank below all oLher
clains in Lhe evenL of insolvency or
liquidaLion of Lhe insLiLuLion;
I\ !he insLrunenLs enLiLle Lheir owners
Lo a clain on Lhe residual asseLs of
Lhe insLiLuLion, which, in Lhe evenL of
iLs liquidaLion and afLer Lhe aynenL
of all senior clains, is roorLionaLe
Lo Lhe anounL of such insLrunenLs
issued and is noL fixed or sub|ecL Lo a
ca, exceL in Lhe case of Lhe caiLal
insLrunenLs referred Lo in ArLicle 26 of
Lhe roosed Eb PequlaLion;
-\ !he insLrunenLs are noL secured, or
quaranLeed by any of Lhe followinq:
"\ !he insLiLuLion or iLs subsidiaries;
""\ !he arenL insLiLuLion or iLs
subsidiaries;
"""\ !he arenL financial holdinq
conany or iLs subsidiaries;
"/\ !he nixed acLiviLy holdinq
conany or iLs subsidiaries;
/\ !he nixed financial holdinq
conany and iLs subsidiaries;
/"\ Any underLakinq LhaL has close
links wiLh Lhe enLiLies referred Lo in
oinLs (i} Lo (v};
A\ !he insLrunenLs are noL sub|ecL
Lo any arranqenenL, conLracLual or
oLherwise, LhaL enhances Lhe senioriLy
of clains under Lhe insLrunenLs in
insolvency or liquidaLion.
CaiLal insLrunenLs issued by
nuLuals, cooeraLive socieLies and
sinilar insLiLuLions need Lo neeL
Lhe condiLions nenLioned in ArLicle
2 of Lhe roosed Eb PequlaLion
(see above} as well as Lhe followinq
condiLions as wiLh resecL Lo Lhe
redenLion of Lhe caiLal insLrunenLs
Lo qualify as CE! 1 insLrunenLs:
+\ ExceL where rohibiLed under
alicable naLional law, Lhe insLiLuLion
shall be able Lo refuse Lhe redenLion
of Lhe insLrunenLs;
,\ Where Lhe refusal by Lhe insLiLuLion
of Lhe redenLion of insLrunenLs is
rohibiLed under alicable naLional
law, Lhe rovisions qoverninq Lhe
insLrunenLs shall qive Lhe insLiLuLion
Lhe abiliLy Lo liniL Lheir redenLion;
7\ Pefusal Lo redeen Lhe insLrunenLs,
or Lhe liniLaLion of Lhe redenLion of
Lhe insLrunenLs where alicable, nay
noL consLiLuLe an evenL of defaulL of
Lhe insLiLuLion.
!he Eb also addresses Lhe Loic of
"silenL arLnershi," oinLinq ouL LhaL
iL is a qeneric Lern coverinq caiLal
insLrunenLs wiLh widely varyinq
characLerisLics (e.q., in Lerns of abiliLy
Lo absorb losses}. WheLher or noL silenL
arLnershi would qualify as a CE! 1
iLen deends on Lhe characLerisLics
of Lhe insLrunenL. !he iLens nusL be
of exLrenely hiqh qualiLy and able Lo
absorb losses fully as Lhey occur.
11

!he CE! 1 caiLal should include
CE! 1 iLens afLer Lhe alicaLion of
requlaLory ad|usLnenLs, deducLions
and exenLions and alLernaLives.
18
9=9=9 .66"0"12+- *"&% 4
7+<"0+-
AddiLional !ier 1 insLrunenLs include:
a} insLrunenLs where Lhe below-
nenLioned condiLions of ArLicle 40 of
Lhe roosed Eb PequlaLion are neL;
and b} Lhe share reniun accounLs
relaLed Lo Lhese insLrunenLs.
Accordinq Lo ArLicle 40 of Lhe
roosed Eb PequlaLion, caiLal
insLrunenLs need Lo neeL all of Lhe
followinq condiLions Lo qualify as
addiLional !ier 1 caiLal iLens:
+\ !he insLrunenLs are issued and
aid u;
,\ !he insLrunenLs are noL urchased
by any of Lhe followinq:
"\ !he insLiLuLion or iLs subsidiaries;
""\ An underLakinq in which Lhe
insLiLuLion has arLiciaLion in Lhe
forn of ownershi, direcL or by way of
conLrol, of 20% or nore of Lhe voLinq
riqhLs or caiLal of LhaL underLakinq;
7\ !he urchase of Lhe insLrunenLs is
noL funded direcLly or indirecLly by Lhe
insLiLuLion;
6\ !he insLrunenLs rank below !ier
2 insLrunenLs in Lhe evenL of Lhe
insolvency of Lhe insLiLuLion;
&\ !he insLrunenLs are noL secured, or
quaranLeed by any of Lhe followinq:
"\ !he insLiLuLion or iLs subsidiaries;
""\ !he arenL insLiLuLion or iLs
subsidiaries;
"""\ !he arenL financial holdinq
conany or iLs subsidiaries;
"/\ !he nixed acLiviLy holdinq
conany or iLs subsidiaries;
/\ !he nixed financial holdinq
conany and iLs subsidiaries;
/"\ Any underLakinq LhaL has close
links wiLh enLiLies referred Lo in oinLs
(i} Lo (v};
;\ !he insLrunenLs are noL sub|ecL
Lo any arranqenenL, conLracLual or
oLherwise, LhaL enhances Lhe senioriLy
of Lhe clain under Lhe insLrunenLs in
insolvency or liquidaLion;
#\ !he insLrunenLs are ereLual and
Lhe rovisions qoverninq Lhen include
no incenLive for Lhe insLiLuLion Lo
redeen Lhen;
h} Where Lhe rovisions qoverninq
Lhe insLrunenLs include one or nore
call oLions, Lhe oLion Lo call nay be
exercised aL Lhe sole discreLion of Lhe
issuer;
"\ !he insLrunenLs nay be called,
redeened or reurchased only where
Lhe condiLions laid down in ArLicle
72 of Lhe roosed Eb PequlaLion are
neL, and noL before five years afLer
Lhe daLe of issuance;
P\ !he rovisions qoverninq Lhe
insLrunenLs do noL indicaLe exliciLly
or inliciLly LhaL Lhe insLrunenLs
would or niqhL be called, redeened
or reurchased and Lhe insLiLuLion
does noL oLherwise rovide such an
indicaLion;
I\ !he insLiLuLion does noL indicaLe
exliciLly or inliciLly LhaL Lhe
coneLenL auLhoriLy would consenL Lo
a requesL Lo call, redeen or reurchase
Lhe insLrunenLs;
-\ 0isLribuLions under Lhe insLrunenLs
neeL Lhe followinq condiLions:
"\ !hey are aid ouL of disLribuLable
iLens;
""\ !he level of disLribuLions nade on
Lhe insLrunenLs will noL be nodified
based on Lhe crediL sLandinq of Lhe
insLiLuLion, iLs arenL insLiLuLion or
arenL financial holdinq conany or
nixed acLiviLy holdinq conany;
"""\ !he rovisions qoverninq Lhe
insLrunenLs qive Lhe insLiLuLion full
discreLion aL all Lines Lo cancel Lhe
disLribuLions on Lhe insLrunenLs for
an unliniLed eriod and on a non-
cunulaLive basis, and Lhe insLiLuLion
nay use such cancelled aynenLs
wiLhouL resLricLion Lo neeL iLs
obliqaLions as Lhey fall due;
"/\ CancellaLion of disLribuLions does
noL consLiLuLe an evenL of defaulL of
Lhe insLiLuLion;
/\ !he cancellaLion of disLribuLions
inoses no resLricLions on Lhe
insLiLuLion;
A\ !he insLrunenLs do noL conLribuLe
Lo a deLerninaLion LhaL Lhe liabiliLies
of an insLiLuLion exceed iLs asseLs,
where such a deLerninaLion
consLiLuLes a LesL of insolvency under
alicable naLional law;
2\ !he rovisions qoverninq Lhe
insLrunenLs require Lhe rincial
anounL of Lhe insLrunenLs Lo be
wriLLen down, or Lhe insLrunenLs Lo be
converLed Lo CE! 1 insLrunenLs, uon
Lhe occurrence of a Lriqqer evenL;
1\ !he rovisions qoverninq Lhe
insLrunenLs include no feaLure LhaL
could hinder Lhe recaiLalizaLion of Lhe
insLiLuLion;
<\ Where Lhe insLrunenLs are noL
issued direcLly by Lhe insLiLuLion or
by an oeraLinq enLiLy wiLhin Lhe
consolidaLion ursuanL Lo rudenL
consolidaLion (ChaLer 2 of !iLle ll of
ParL 0ne}, Lhe arenL insLiLuLion, Lhe
arenL financial holdinq conany, or
Lhe nixed acLiviLy holdinq conany,
Lhe roceeds are innediaLely available
wiLhouL liniLaLion in a forn LhaL
saLisfies Lhe condiLions laid down in
Lhis araqrah Lo any of Lhe followinq:
"\ !he insLiLuLion;
""\ An oeraLinq enLiLy wiLhin Lhe
consolidaLion ursuanL Lo ChaLer 2 of
!iLle ll of ParL 0ne;
"""\ !he arenL insLiLuLion;
"/\ !he arenL financial holdinq
conany;
/\ !he nixed acLiviLy holdinq conany.
!he Eb sLandard
12
requires LhaL all
caiLal insLrunenLs recoqnized in Lhe
AddiLional !ier 1 caiLal are wriLLen
down or converLed inLo Connon
EquiLy !ier 1 insLrunenLs when Lhe
CE! 1 caiLal raLio falls below 6.126%
(conLinqenL caiLal}. ConLinqenL caiLal
noL fulfillinq Lhese requirenenLs
will noL be recoqnized as
requlaLory caiLal.
10
Peqardinq hybrid caiLal insLrunenLs,
Lhe Eb sLandard builds uon Lhe
anendnenLs nade under Lhe CP0
ll concerninq Lhe qualiLy of such
insLrunenLs, inLroducinq sLricLer
eliqibiliLy criLeria for inclusion in
AddiLional !ier 1 caiLal. Rybrid caiLal
insLrunenLs need Lo absorb losses by
beinq wriLLen down or converLed inLo
CE! 1 insLrunenLs when CE! 1 caiLal
raLio falls below 6.126%. Rybrid
caiLal insLrunenLs wiLh an incenLive
Lo redeen, which are currenLly liniLed
Lo 16% of Lhe !ier 1 caiLal base (see
CP0 ll}, will be hased ouL under
8asel lll.
!he AddiLional !ier 1 caiLal base
consisLs of Lhe corresondinq
insLrunenLs afLer deducLions.
9=9=D *"&% 9 7+<"0+-
!he new definiLion of caiLal
raLionalizes !ier 2 caiLal by
elininaLinq ber !ier 2 fron Lhe
caiLal sLrucLure. lL also inLroduces
harnonized and sLricL eliqibiliLy
criLeria. bnder 8asel lll, !ier 2 caiLal
ensures loss absorLion in case of
liquidaLion (qone-concern}.
!ier 2 caiLal includes Lhe followinq
iLens:
+\ CaiLal insLrunenLs, where Lhe
condiLions laid down in ArLicle 0 are
neL;
,\ !he share reniun accounLs relaLed
Lo Lhe insLrunenLs referred Lo in oinL
(a};
7\ For insLiLuLions calculaLinq risk-
weiqhLed exosure anounLs in
accordance wiLh Lhe SLandardized
Aroach, qeneral crediL risk
ad|usLnenLs, qross-of-Lax effecLs, of
u Lo 1.26% of risk-weiqhLed exosure
anounLs calculaLed in accordance
wiLh Lhe SLandardized Aroach;
6\ For insLiLuLions calculaLinq risk-
weiqhLed exosure anounLs under
Lhe lnLernal PaLinqs 8ased aroach
(lP8}, osiLive anounLs, qross-of-Lax
effecLs, resulLinq fron Lhe calculaLion
laid down in ArLicle 164 and 166 u
Lo 0.% of risk-weiqhLed exosure
anounLs calculaLed under Lhe lP8
aroach.
Accordinq Lo ArLicle 0 of Lhe
roosed Eb PequlaLion, insLrunenLs
need Lo fulfill Lhe followinq condiLions
Lo qualify as !ier 2 caiLal:
+\ !he insLrunenLs are issued and fully
aid-u;
,\ !he insLrunenLs are noL urchased
by any of Lhe followinq:
"\ !he insLiLuLion or iLs subsidiaries;
""\ An underLakinq in which Lhe
insLiLuLion has arLiciaLion in Lhe
forn of ownershi, direcL or by way of
conLrol, of 20% or nore of Lhe voLinq
riqhLs or caiLal of LhaL underLakinq;
7\ !he urchase of Lhe insLrunenLs is
noL funded direcLly or indirecLly by Lhe
insLiLuLion;
6\ !he clain on Lhe rincial anounL
of Lhe insLrunenLs under Lhe
rovisions qoverninq Lhe insLrunenLs
is wholly subordinaLed Lo clains of all
non-subordinaLed crediLors;
&\ !he insLrunenLs are noL secured, or
quaranLeed by any of Lhe followinq:
"\ !he insLiLuLion or iLs subsidiaries;
""\ !he arenL insLiLuLion or iLs
subsidiaries;
"""\ !he arenL financial holdinq
conany or iLs subsidiaries;
"/\ !he nixed acLiviLy holdinq
conany or iLs subsidiaries;
/\ !he nixed financial holdinq
conany and iLs subsidiaries;
/"\ Any underLakinq LhaL has close
links wiLh enLiLies referred Lo in oinLs
(i} Lo (v};
;\ !he insLrunenLs are noL sub|ecL
Lo any arranqenenL LhaL oLherwise
enhances Lhe senioriLy of Lhe clain
under Lhe insLrunenLs;
#\ !he insLrunenLs have an oriqinal
naLuriLy of aL leasL five years;
L\ !he rovisions qoverninq Lhe
insLrunenLs do noL include any
incenLive for Lhen Lo be redeened by
Lhe insLiLuLion;
"\ Where Lhe insLrunenLs include one
or nore call oLions, Lhe oLions are
exercisable aL Lhe sole discreLion of
Lhe issuer;
P\ !he insLrunenLs nay be called,
redeened or reurchased only where
Lhe condiLions laid down in ArLicle
72 of Lhe roosed Eb PequlaLion are
neL, and noL before five years afLer
Lhe daLe of issuance;
I\ !he rovisions qoverninq Lhe
insLrunenLs do noL indicaLe or suqqesL
LhaL Lhe insLrunenLs would or niqhL
be redeened or reurchased oLher
Lhan aL naLuriLy and Lhe insLiLuLion
does noL oLherwise rovide such an
indicaLion or suqqesLion;
-\ !he rovisions qoverninq Lhe
insLrunenLs do noL qive Lhe holder
Lhe riqhL Lo acceleraLe Lhe fuLure
scheduled aynenL of inLeresL or
rincial, oLher Lhan in Lhe insolvency
or liquidaLion of Lhe insLiLuLion;
A\ !he level of inLeresL or dividend
aynenLs due on Lhe insLrunenLs will
noL be nodified based on Lhe crediL
sLandinq of Lhe insLiLuLion, iLs arenL
insLiLuLion or arenL financial holdinq
conany or nixed acLiviLy holdinq
conany;
2\ Where Lhe insLrunenLs are noL
issued direcLly by Lhe insLiLuLion or
by an oeraLinq enLiLy wiLhin Lhe
consolidaLion ursuanL Lo rudenL
consolidaLion (ChaLer 2 of !iLle ll of
ParL 0ne}, Lhe arenL insLiLuLion, Lhe
arenL financial holdinq conany, or
Lhe nixed acLiviLy holdinq conany,
Lhe roceeds are innediaLely available
wiLhouL liniLaLion in a forn LhaL
saLisfies Lhe condiLions laid down in
Lhis araqrah Lo any of Lhe followinq:
"\ !he insLiLuLion;
""\ An oeraLinq enLiLy wiLhin Lhe
consolidaLion ursuanL Lo ChaLer 2 of
!iLle ll of ParL 0ne;
"""\ !he arenL insLiLuLion;
"/\ !he arenL financial holdinq
conany;
/\ !he nixed acLiviLy holdinq conany.
!he !ier 2 caiLal base consisLs of
Lhe corresondinq insLrunenLs afLer
deducLions.
20
2.8 PrudenLial filLers and deducLions
9=D=4 E%$6&20"+- ;"-0&%'
!he 8asel lll sLandard harnonizes
requlaLory ad|usLnenLs (i.e., deducLions
fron caiLal and rudenLial filLers}
which will qenerally be alied aL Lhe
level of CE! 1 caiLal or iLs equivalenL
in Lhe case of non-|oinL sLock
conanies in Lhe fuLure.
N&#$-+01%H .6P$'0A&20'
50&A :&'7%"<0"12
E%$6&20"+- ;"-0&%'
SecuriLized asseLs An insLiLuLion shall exclude fron any elenenL of own funds any increase in iLs
equiLy under Lhe alicable accounLinq sLandard LhaL resulLs fron securiLized
asseLs.
Cash flow hedqes and chanqes in Lhe
value of own liabiliLies
!he fair value reserves relaLed Lo qains or losses on cash flow hedqes of
financial insLrunenLs LhaL are noL valued aL fair value, includinq ro|ecLed
cash flows; and qains or losses on liabiliLies of Lhe insLiLuLion LhaL are valued
aL fair value LhaL resulL fron chanqes in Lhe crediL sLandinq of Lhe insLiLuLion
should noL be included in any elenenL of own funds.
AddiLional value ad|usLnenLs lnsLiLuLions shall aly Lhe requirenenLs for rudenL valuaLion secified
in Lhe roosed PequlaLion Lo all Lheir asseLs neasured aL fair value when
calculaLinq Lhe anounL of Lheir own funds and shall deducL fron CE! 1
caiLal Lhe anounL of any addiLional value ad|usLnenLs necessary.
bnrealized qains and losses neasured
aL fair value
lnsLiLuLions shall qenerally noL nake ad|usLnenLs Lo renove fron Lheir own
funds unrealized qains or losses on Lheir asseLs or liabiliLies neasured aL fair
value.
*+,-& 9Y E%$6&20"+- ;"-0&%' X+'&- 555
Source: hew roosals on caiLal requirenenLs (July 2011}, Euroean Connission found aL hLL:jjec.euroa.eujinLernal_narkeLjbankjreqcaiLaljindex_en.hLn
21
Source: hew roosals on caiLal requirenenLs (July 2011}, Euroean Connission found aL hLL:jjec.euroa.eujinLernal_narkeLjbankjreqcaiLaljindex_en.hLn
9=D=9 :&6$70"12' ;%1A @K* 4 7+<"0+-
N&#$-+01%H .6P$'0A&20'
50&A :&'7%"<0"12
:&6$70"12' ;%1A @K* 4 7+<"0+-
Losses for currenL fiscal year
lnLanqible asseLs lnsLiLuLions shall deLernine Lhe inLanqible asseLs Lo be deducLed in accordance
wiLh Lhe followinq:
(a} Lhe anounL Lo be deducLed shall be reduced by Lhe anounL of associaLed
deferred Lax liabiliLies LhaL would be exLinquished if Lhe inLanqible asseLs becane
inaired or were derecoqnized under Lhe relevanL accounLinq sLandard;
(b} Lhe anounL Lo be deducLed shall include qoodwill included in Lhe valuaLion of
siqnificanL invesLnenLs of Lhe insLiLuLion.
0eferred Lax asseLs 0eferred Lax asseLs LhaL rely on fuLure rofiLabiliLy accordinq Lo ArLicle 86 of Lhe
roosed Eb PequlaLion.
0eferred Lax asseLs LhaL do noL rely on fuLure rofiLabiliLy accordinq Lo ArLicle 8
of Lhe roosed Eb PequlaLion.
heqaLive execLed losses lP8 banks should deducL neqaLive anounLs resulLinq fron Lhe calculaLion of
execLed loss (see ArLicle 87 of Lhe Eb roosed PequlaLion}.
8enefiL ension fund asseLs 8enefiL ension fund asseLs should be deducLed accordinq Lo ArLicle 88 of Lhe
roosed Eb PequlaLion.
0irecL and indirecL holdinq of CE! 1
iLens
0irecL and indirecL holdinqs by an insLiLuLion of own CE!1 insLrunenLs, includinq
own CE! 1 insLrunenLs LhaL an insLiLuLion is under an acLual or conLinqenL
obliqaLion Lo urchase by virLue of an exisLinq conLracLual obliqaLion (see ArLicle
80 of Lhe roosed Eb PequlaLion}.
Roldinqs of CE! 1 iLens of enLiLies
wiLh recirocal cross holdinq
Roldinqs of Lhe CE! 1 insLrunenLs of relevanL enLiLies where Lhose enLiLies have
a recirocal cross holdinq wiLh Lhe insLiLuLion LhaL Lhe coneLenL auLhoriLy
considers Lo have been desiqned Lo inflaLe arLificially Lhe own funds of Lhe
insLiLuLion (see ArLicle 41 of Lhe roosed Eb PequlaLion}.
hoL-siqnificanL invesLnenLs in relevanL
enLiLies
!he alicable anounL of direcL and indirecL holdinqs by Lhe insLiLuLion of CE! 1
insLrunenLs of relevanL enLiLies where Lhe insLiLuLion does noL have a siqnificanL
invesLnenL in Lhose enLiLies (see ArLicle 48 of Lhe roosed Eb PequlaLion}.
SiqnificanL invesLnenLs in relevanL
enLiLies
!he alicable anounL of direcL and indirecL holdinqs by Lhe insLiLuLion of Lhe
CE! 1 insLrunenLs of relevanL enLiLies where Lhe insLiLuLion has a siqnificanL
invesLnenL (e.q., Lhe insLiLuLion owns nore Lhan 10% of Lhe CE! 1 insLrunenLs
issued by LhaL enLiLy} in Lhose enLiLies (see ArLicle 40 of Lhe roosed Eb
PequlaLion}.
AnounL LhaL exceed AddiLional !ier 1
caiLal
!he anounL of iLens required Lo be deducLed fron AddiLional !ier 1 iLens LhaL
exceed Lhe AddiLional !ier 1 caiLal of Lhe insLiLuLion.
AlLernaLive Lo risk-weiqhL of 1.260% !he exosure anounL of Lhe secified iLens (e.q., qualifyinq holdinqs ouLside Lhe
financial secLor} which qualify for a risk-weiqhL of 1.260%, where Lhe insLiLuLion
deducLs LhaL exosure anounL fron CE! 1 caiLal as an alLernaLive Lo alyinq a
risk-weiqhL of 1.260%.
!ax charqe Any Lax charqe relaLinq Lo CE! 1 iLens foreseeable aL Lhe nonenL of iLs
calculaLion, exceL where Lhe insLiLuLion suiLably ad|usLs Lhe anounL of CE! 1
iLens insofar as such Lax charqes reduce Lhe anounL u Lo which Lhose iLens nay
be alied Lo cover risks or losses.
*+,-& DY :&6$70"12 ;%1A @K* 4 7+<"0+- "2 X+'&- 555
22
Source: hew roosals on caiLal requirenenLs (July 2011}, Euroean Connission found aL hLL:jjec.euroa.euj
inLernal_narkeLjbankjreqcaiLaljindex_en.hLn
9=D=D KO&A<0"12' ;%1A
+26 +-0&%2+0"/&' 01
6&6$70"12 ;%1A @K* 4
"0&A'
!he followinq iLens, which in
aqqreqaLe are equal Lo or less Lhan
16% of Lhe CE! 1 caiLal of Lhe
insLiLuLion (afLer ad|usLnenLs}, nay
noL be deducLed fron CE! 1 caiLal:
0eferred Lax asseLs LhaL are
deendenL on fuLure rofiLabiliLy and
arise fron Lenorary differences,
and in aqqreqaLe are equal Lo or less
Lhan 10% of Lhe CE! 1 iLens of Lhe
insLiLuLion (afLer ad|usLnenLs};
SiqnificanL invesLnenLs in a relevanL
enLiLy,
18
Lhe direcL and indirecL
holdinqs of LhaL insLiLuLion of Lhe
CE! 1 insLrunenLs of Lhose enLiLies
LhaL in aqqreqaLe are equal Lo or less
Lhan 10% of Lhe CE! 1 iLens of Lhe
insLiLuLion (afLer ad|usLnenLs}.
lnsLrunenLs LhaL are noL deducLed
shall be assiqned a risk-weiqhL of
260%.
!he Eb sLandard allows alLernaLives Lo
Lhe deducLion of siqnificanL holdinqs
of insLiLuLions in Lhe CE! 1 insLrunenLs
of oLher financial enLiLies like
insurance underLakinqs, reinsurance
underLakinqs and insurance holdinq
conanies included in Lhe scoe of
consolidaLed suervision (ArLicle
4 of Lhe roosed Eb PequlaLion}.
!he Euroean Connission |usLifies
Lhis asecL wiLh Lhe so-called
"bancassurance" business nodel
which is a key feaLure of Lhe Eb
bankinq landscae, i.e., qrous LhaL
conLain siqnificanL bankinqjinvesLnenL
businesses and insurance businesses.
14

FurLher, Lhe sLandard erniLs nuLuals,
cooeraLive socieLies or sinilar
insLiLuLions noL Lo deducL siqnificanL
and noL-siqnificanL holdinqs in anoLher
such insLiLuLion or in iLs cenLral
or reqional crediL insLiLuLion if Lhe
secified condiLions are neL (see
chaLer 2.6}.
9=D=) :&6$70"12' ;%1A .66"0"12+- *"&% 4 7+<"0+-
N&#$-+01%H .6P$'0A&20'
50&A :&'7%"<0"12
:&6$70"12' ;%1A .66"0"12+-
*"&% 4 7+<"0+-
0irecL and indirecL holdinq
of AddiLional !ier 1 iLens
0irecL and indirecL holdinqs by an insLiLuLion of
own AddiLional !ier 1 insLrunenLs, includinq own
AddiLional !ier 1 insLrunenLs LhaL an insLiLuLion
could be obliqed Lo urchase as a resulL of
exisLinq conLracLual obliqaLions (see ArLicle 64 of
Lhe roosed Eb PequlaLion}.
Roldinqs of AddiLional !ier
1 iLens of enLiLies wiLh
recirocal cross holdinq
Roldinqs of Lhe AddiLional !ier 1 insLrunenLs of
relevanL enLiLies wiLh which Lhe insLiLuLion has
recirocal cross holdinqs LhaL Lhe coneLenL
auLhoriLy considers Lo have been desiqned Lo
inflaLe arLificially Lhe own funds of Lhe insLiLuLion
(see ArLicle 66 of Lhe roosed Eb PequlaLion}.
hoL-siqnificanL invesLnenLs
in relevanL enLiLies
0irecL and indirecL holdinqs of Lhe AddiLional
!ier 1 insLrunenLs of relevanL enLiLies, where an
insLiLuLion does noL have a siqnificanL invesLnenL
in Lhose enLiLies (see ArLicle 67 of Lhe roosed
Eb PequlaLion}.
SiqnificanL invesLnenLs in
relevanL enLiLies
0irecL and indirecL holdinqs by Lhe insLiLuLion
of Lhe AddiLional !ier 1 insLrunenLs of relevanL
enLiLies where Lhe insLiLuLion has a siqnificanL
invesLnenL in Lhose enLiLies, excludinq
underwriLinq osiLions held for five workinq days
or fewer.
AnounL LhaL exceeds !ier
2 caiLal
!he anounL of iLens required Lo be deducLed
fron !ier 2 iLens LhaL exceed Lhe !ier 2 caiLal of
Lhe insLiLuLion.
!ax charqe Any Lax charqe relaLinq Lo AddiLional !ier 1 iLens
foreseeable aL Lhe nonenL of iLs calculaLion,
exceL where Lhe insLiLuLion suiLably ad|usLs Lhe
anounL of AddiLional !ier 1 iLens insofar as such
Lax charqes reduce Lhe anounL u Lo which Lhose
iLens nay be alied Lo cover risks or losses.
*+,-& )Y :&6$70"12 ;%1A .66"0"12+- *"&% 4 7+<"0+- "2 X+'&- 555
28
Source: hew roosals on caiLal requirenenLs (July 2011}, Euroean Connission found aL hLL:jjec.euroa.eujinLernal_narkeLjbankjreqcaiLaljindex_en.hLn
9=D=3 :&6$70"12' ;%1A *"&% 9 "0&A'
N&#$-+01%H .6P$'0A&20'
50&A :&'7%"<0"12
:&6$70"12' ;%1A *"&% 9 7+<"0+-
0irecL and indirecL holdinq of !ier 2
iLens
0irecL and indirecL holdinqs by an insLiLuLion of own !ier 2 insLrunenLs, includinq
own !ier 2 insLrunenLs LhaL an insLiLuLion could be obliqed Lo urchase as a resulL
of exisLinq conLracLual obliqaLions.
Roldinqs of AddiLional !ier 2 iLens of
enLiLies wiLh recirocal cross holdinq
Roldinqs of Lhe !ier 2 insLrunenLs of relevanL enLiLies wiLh which Lhe insLiLuLion
has recirocal cross holdinqs LhaL Lhe coneLenL auLhoriLy considers Lo have been
desiqned Lo inflaLe arLificially Lhe own funds of Lhe insLiLuLion (see ArLicle 6 of
Lhe roosed Eb PequlaLion}.
hoL-siqnificanL invesLnenLs in relevanL
enLiLies
!he alicable anounL deLernined in accordance wiLh ArLicle 7 of direcL and
indirecL holdinqs of Lhe !ier 2 insLrunenLs of relevanL enLiLies, where an insLiLuLion
does noL have a siqnificanL invesLnenL in Lhose enLiLies.
SiqnificanL invesLnenLs in relevanL
enLiLies
0irecL and indirecL holdinqs by Lhe insLiLuLion of Lhe !ier 2 insLrunenLs of relevanL
enLiLies where Lhe insLiLuLion has a siqnificanL invesLnenL in Lhose enLiLies,
excludinq underwriLinq osiLions held for fewer Lhan 6 workinq days.
*+,-& 3Y :&6$70"12 ;%1A .66"0"12+- *"&% 9 7+<"0+- "2 X+'&- 555
24
2.4 MinoriLy inLeresLs
9=)=4 G"21%"0H "20&%&'0'
0L+0 M$+-";H ;1% "27-$'"12
"2 712'1-"6+0&6 @K* 4
7+<"0+-
MinoriLy inLeresL includes CE! 1
insLrunenLs, Lhe relaLed reLained
earninqs and share reniun accounLs
of a subsidiary where Lhe followinq
condiLions are neL:
+\ !he subsidiary is one of Lhe
followinq:
"\ An insLiLuLion;
""\ An underLakinq LhaL is sub|ecL by
virLue of alicable naLional law Lo
Lhe requirenenLs of Lhe roosed Eb
PequlaLion and roosed 0irecLive;
,\ !he subsidiary is included fully in
Lhe consolidaLion;
7\ !hose CE! 1 insLrunenLs are owned
by ersons oLher Lhan Lhe underLakinqs
included in Lhe consolidaLion.
MinoriLy inLeresLs LhaL are funded
direcLly or indirecLly, Lhrouqh a
secial-urose enLiLy or oLherwise, by
Lhe arenL insLiLuLion, arenL financial
holdinq conany, nixed acLiviLy
holdinq conany or Lheir subsidiaries
shall noL qualify as consolidaLed CE! 1
caiLal.
lnsLiLuLions should deLernine Lhe
anounL of ninoriLy inLeresLs of a
subsidiary included in Lhe consolidaLed
CE! 1 caiLal accordinq Lo ArLicle 70
of Lhe roosed Eb PequlaLion.
9=)=9 f$+-";H"2#
.66"0"12+- *"&% 4e *"&%
4e *"&% 9 7+<"0+- +26
M$+-";H"2# 1?2 ;$26'
0ualifyinq AddiLional !ier 1, !ier 1,
!ier 2 caiLal and qualifyinq own
funds include Lhe ninoriLy inLeresL,
AddiLional !ier 1, !ier 1 or !ier 2
insLrunenLs, as alicable, lus Lhe
relaLed reLained earninqs and share
reniun accounLs, of a subsidiary
where Lhe followinq condiLions
are neL:
+\ !he subsidiary is one of Lhe
followinq:
"\ An insLiLuLion;
""\ An underLakinq LhaL is sub|ecL by
virLue of alicable naLional law Lo
Lhe requirenenLs of Lhe roosed Eb
PequlaLion and roosed 0irecLive;
,\ !he subsidiary is included fully in
Lhe consolidaLion;
6\ !hose insLrunenLs are owned by
ersons oLher Lhan Lhe underLakinqs
included in Lhe consolidaLion.
AddiLional !ier 1 and !ier 2 caiLal
issued by secial-urose enLiLies
nay be included only if Lhe condiLions
secified in ArLicle 78 of Lhe roosed
Eb PequlaLion are neL.
lnsLiLuLions should deLernine Lhe
anounL of qualifyinq !ier 1 caiLal
of a subsidiary LhaL is included in
Lhe consolidaLed !ier 1 caiLal and
consolidaLed AddiLional !ier 1 caiLal
accordinq Lo ArLicles 80-81 of Lhe
roosed Eb PequlaLion. !he anounL
of qualifyinq own funds of a subsidiary
LhaL is included in consolidaLed own
funds and in consolidaLed !ier 2
caiLal shall be deLernined accordinq
Lo ArLicle 82 and 88 resecLively of
Lhe roosed Eb PequlaLion.
2.6
lnsLiLuLional
neLworks
!he Eb sLandard allows nuLuals,
cooeraLive socieLies or sinilar
insLiLuLions noL Lo deducL siqnificanL
and noL-siqnificanL holdinqs in anoLher
such insLiLuLion or in iLs cenLral
or reqional crediL insLiLuLion if Lhe
followinq condiLions are neL:
"\ Where Lhe holdinq is in a cenLral
or reqional crediL insLiLuLion, Lhe
insLiLuLion wiLh LhaL holdinq is
associaLed wiLh LhaL cenLral or
reqional crediL insLiLuLion in a
neLwork sub|ecL Lo leqal or sLaLuLory
rovisions and Lhe cenLral or reqional
crediL insLiLuLion is resonsible, under
Lhose rovisions, for cash-clearinq
oeraLions wiLhin LhaL neLwork;
""\ !he insLiLuLions fall wiLhin Lhe sane
insLiLuLional roLecLion schene;
"""\ !he coneLenL auLhoriLies have
qranLed Lhe ernission referred Lo in
ArLicle 108(7};
16

"/\ !he condiLions laid down in ArLicle
108(7} are saLisfied;
/\ !he insLiLuLion draws u and
reorLs Lo Lhe coneLenL auLhoriLies
Lhe consolidaLed balance sheeL
referred Lo in oinL (e} of ArLicle
108(7} no less frequenLly Lhan own
funds requirenenLs are required Lo be
reorLed under ArLicle 06.
A reqional crediL insLiLuLion nay
noL deducL holdinqs in iLs cenLral or
anoLher reqional crediL insLiLuLion
if Lhe condiLions nenLioned above
are neL.
26
2. CaiLal buffers
8asel lll inLroduces Lwo caiLal buffers
in addiLion Lo Lhe caiLal requirenenLs:
a caiLal conservaLion buffer and a
counLercyclical caiLal buffer. While
Lhe definiLion of caiLal is LreaLed
in Lhe roosed Eb PequlaLion, Lhe
caiLal buffers are discussed in Lhe
corresondinq roosed 0irecLive
requirinq naLional LransosiLion.
1
9=8=4 @+<"0+-
712'&%/+0"12 ,$;;&%
!he caiLal conservaLion buffer, 2.6%
of PWA and Lo be neL wiLh CE! 1
caiLal, alies aL all Lines and iL is
inLended Lo ensure LhaL insLiLuLions
are able Lo absorb losses in sLress
eriods lasLinq for a nunber of
years. Considerinq Lhe 4.6% CE! 1
caiLal raLio, insLiLuLions nusL hold
7.0% CE! 1 caiLal on an individual
and consolidaLed basis aL all Lines.
lnsLiLuLions are execLed Lo build u
Lhe caiLal in qood econonic Lines.
ln case insLiLuLions fail Lo neeL fully
Lhe "conbined buffer requirenenL"
(i.e., Lhe LoLal CE! 1 caiLal required Lo
neeL Lhe requirenenL for Lhe caiLal
conservaLion buffer exLended by an
insLiLuLion-secific counLercyclical
caiLal buffer}, disLribuLion consLrainLs
on CE! 1 caiLal are inosed. CE!
1 caiLal should Lhereby include Lhe
followinq iLens:
+\ A aynenL of cash dividends;
,\ A disLribuLion of fully or arLly
aid bonus shares or oLher caiLal
insLrunenLs;
7\ A redenLion or urchase by an
insLiLuLion of iLs own shares or oLher
secified caiLal insLrunenLs;
6\ A reaynenL of anounLs aid u
in connecLion wiLh secified caiLal
insLrunenLs;
&\ A disLribuLion of iLens referred Lo in
oinLs (b} Lo (e} of ArLicle 24(1} of LhaL
PequlaLion.
Fallinq below Lhe conbined buffer
requirenenL, insLiLuLions have Lo
calculaLe Lhe "Maxinun 0isLribuLable
AnounL" (M0A}. !he facLor Lo
calculaLe Lhe M0A deends on how
nuch an insLiLuLion is droinq below
Lhe requirenenL and ranqes fron 0%
(firsLjlowesL quarLile} Lo 0% (fourLhj
hiqhesL quarLile}.
17

FurLher, Lhe affecLed insLiLuLions
should reare a caiLal conservaLion
lan and subniL iL Lo Lhe coneLenL
auLhoriLies includinq Lhe followinq:
esLinaLes of incone and exendiLure
and a forecasL balance sheeL;
neasures Lo increase Lhe caiLal raLios
of Lhe insLiLuLion; and a lan and
Linefrane for Lhe increase of own
funds wiLh Lhe ob|ecLive of neeLinq
fully Lhe conbined buffer requirenenL.
!he caiLal conservaLion buffer arLly
solves Lhe requlaLory aradox afLer
which hiqher nininun caiLal should
noL be used Lo absorb losses fallinq
below Lhe nininun requirenenLs,
leadinq Lo a wiLhdrawal of Lhe
bankinq license. WiLh Lhe inLroduced
caiLal buffers and Lhe associaLed
disLribuLion consLrainLs fallinq below
Lhe requirenenLs, a "sofLer" requlaLory
Lool is inLroduced.
18

9=8=9 @1$20&%7H7-"7+-
7+<"0+- ,$;;&%
!he counLercyclical caiLal buffer is
inLroduced Lo "achieve Lhe broader
nacro-rudenLial qoal of roLecLinq
Lhe bankinq secLor and Lhe real
econony fron Lhe sysLen-wide
risks sLenninq fron Lhe boon-busL
evoluLion in aqqreqaLe crediL qrowLh
and nore qenerally fron any oLher
sLrucLural variables and fron Lhe
exosure of Lhe bankinq secLor Lo
any oLher risk facLors relaLed Lo risks
Lo financial sLabiliLy."
10
!he level of
Lhis buffer is seL by each Menber
SLaLe, ranqes beLween 0% and 2.6%
of PWA
20
and has Lo be neL by CE! 1
caiLal.
21
!he buffer is required durinq
eriods of excessive crediL qrowLh and
iL is released in an econonic downLurn.
ln cases where insLiLuLions fail Lo neeL
fully Lhe counLercyclical caiLal buffer
requirenenLs, caiLal disLribuLion
consLrainLs are inosed (see above}.
!he desiqnaLed auLhoriLy LhaL is
resonsible for seLLinq Lhe buffer
should calculaLe a buffer quide based
on a deviaLion of Lhe raLio of crediL-
Lo-60P fron iLs lonq-Lern Lrend on
a quarLerly basis. An increase of Lhe
counLercyclical caiLal buffer should
qenerally be connunicaLed 12 nonLhs
in advance. A decrease of Lhe buffer
could be alicable innediaLely. !he
desiqnaLed auLhoriLy should qive an
indicaLive (noL bindinq} eriod durinq
which no increase in Lhe buffer is
execLed.
lnLernaLional insLiLuLions need Lo
calculaLe Lhe insLiLuLion-secific
counLercyclical caiLal buffer which
consisLs of Lhe weiqhLed averaqe
of Lhe counLercyclical buffer raLes
LhaL aly in Lhe |urisdicLions where
Lhe relevanL crediL exosures of Lhe
insLiLuLion are locaLed (based on Lhe
own funds requirenenLs for crediL
risk}.
2.7 Enhanced
disclosure
requirenenLs
!he roosed Eb PequlaLion includes
inroved disclosure requirenenLs
reqardinq Lhe caiLal endownenL
and own funds of insLiLuLions. !he
urose is Lo sLrenqLhen narkeL
disciline and enhance financial
sLabiliLy. !he corresondinq Lechnical
sLandards Lo secify uniforn fornaLs,
frequencies, eLc., are Lo be develoed
by Lhe Euroean 8ankinq AuLhoriLy
and subniLLed Lo Lhe Euroean
Connission by January 1, 2018.
8
CounLerarLy CrediL Pisk
2
27
8asel lll sLrenqLhens Lhe requirenenLs for Lhe
nanaqenenL and caiLalizaLion of counLerarLy crediL
risk (CCP}. lL includes an addiLional caiLal charqe for
ossible losses associaLed wiLh deLerioraLion in Lhe
crediLworLhiness of counLerarLies or increased risk-
weiqhLs on exosures Lo larqe financial insLiLuLions. !he
new franework also enhances incenLives for clearinq
over-Lhe-counLer (0!C} insLrunenLs Lhrouqh cenLral
counLerarLies (CCP}.
22

28
8.1 EffecLive
ExecLed
PosiLive
Exosure
For banks usinq an lnLernal Model
MeLhod (lMM} Lo calculaLe CCP
requlaLory caiLal, 8asel lll requires
deLernininq Lhe defaulL risk caiLal
charqe by usinq Lhe qreaLer of Lhe
orLfolio-level caiLal charqe (noL
includinq CvA charqe} based on
EffecLive ExecLed PosiLive Exosure
(EEPE} usinq currenL narkeL daLa
and Lhe one based on EEPE usinq a
sLress calibraLion. !he qreaLer of Lhe
EEPEs should noL be alied on a
counLerarLy-by-counLerarLy basis,
buL on a LoLal orLfolio level.
8.2 CrediL
valuaLion
ad|usLnenL
ln addiLion Lo Lhe defaulL risk caiLal
requirenenLs for CCP, 8asel lll
inLroduces an addiLional caiLal charqe
Lo cover Lhe risk of nark-Lo-narkeL
losses on Lhe execLed counLerarLy
risk (CrediL valuaLion Ad|usLnenL, CvA}
Lo 0!C derivaLives. !he calculaLion
of Lhe CvA charqe deends on Lhe
neLhod banks use Lo deLernine Lhe
caiLal charqe for CCP and secific-
inLeresL raLe risk. !ransacLions wiLh
a cenLral counLerarLy (CCP} and
securiLies financinq LransacLions (SF!}
need noL be considered.
8anks wiLh lMM aroval for CCP
risk and aroval Lo use Lhe narkeL
risk inLernal nodels aroach for Lhe
secific-inLeresL raLe risk of bonds nusL
calculaLe Lhe addiLional caiLal charqe
by nodelinq Lhe inacL of chanqes in
Lhe counLerarLy's crediL sread on
Lhe CvAs of all 0!C derivaLives usinq
Lhe inLernal vaP nodel for bonds. !his
vaP nodel is resLricLed Lo chanqes in
Lhe counLerarLies' crediL sreads and
does noL nodel Lhe sensiLiviLy of CvA
Lo chanqes in oLher narkeL facLors such
as chanqes in Lhe value of Lhe reference
asseL, connodiLy, currency or inLeresL
raLe of a derivaLive. !he CvA risk caiLal
charqe consisLs of boLh qeneral and
secific crediL sread risks, includinq
SLressed vaP buL excludinq increnenLal
risk charqe (lPC}.
All oLher banks nusL calculaLe a
sLandardized CvA risk caiLal charqe.
WiLhin Lhis neLhod - iL is based on Lhe
bond equivalenL aroach - orLfolio
own funds requirenenLs for CvA risk
for each counLerarLy have Lo be
calculaLed usinq Lhe qiven fornula.
!he calculaLion of Lhe aqqreqaLe CCP
and CvA risk caiLal charqes deends
on Lhe neLhods used by banks.
For banks wiLh lMM aroval and
narkeL-risk inLernal-nodels aroval
for Lhe secific inLeresL-raLe risk of
bonds, Lhe LoLal CCP caiLal charqe is
Lhe sun of Lhe followinq cononenLs:
"\ !he hiqher of (a} iLs lMM caiLal
charqe based on currenL araneLer
calibraLions for EA0 and (b} iLs lMM
caiLal charqe based on sLressed
araneLer calibraLions for EA0;
""\ !he advanced CvA risk caiLal
charqe calculaLed wiLh Lhe inLernal
nodels.
For banks wiLh lMM aroval and
wiLhouL Secific-Pisk vaP aroval for
bonds, Lhe LoLal CCP caiLal charqe is
Lhe sun of Lhe followinq cononenLs:
"\ !he hiqher of (a} iLs lMM caiLal
charqe based on currenL araneLer
calibraLions for EA0 and (b} iLs lMM
caiLal charqe based on sLressed
araneLer calibraLions for EA0;
""\ !he sLandardized CvA risk caiLal
charqe.
For all oLher banks, Lhe LoLal CCP
caiLal charqe is Lhe sun of Lhe
followinq cononenLs:
"\ !he sun over all counLerarLies of
Lhe CurrenL Exosure MeLhod (CEM}
or SLandardized MeLhod (SM}-based
caiLal charqe (deendinq on Lhe
bank's CCP aroach};
""\ !he sLandardized CvA risk caiLal
charqe.
20
8.8 Wronq
way risk
ln addiLion Lo Lhe consideraLion
of qeneral wronq way risk - sLress
LesLinq and scenario analysis nusL
be desiqned Lo idenLify such risks
- 8asel lll inLroduces an exliciL
Pillar 1 caiLal charqe for secific
wronq way risk. 8anks are exosed
Lo secific wronq way risk if fuLure
exosure Lo a secific counLerarLy
is hiqhly, osiLively correlaLed wiLh
Lhe counLerarLy's robabiliLy of
defaulL. 8anks nusL "have rocedures
in lace Lo idenLify, noniLor and
conLrol cases of secific wronq way
risk, beqinninq aL Lhe inceLion of a
Lrade and conLinuinq Lhrouqh Lhe life
of Lhe Lrade. !o calculaLe Lhe CCP
caiLal charqe, Lhe insLrunenLs for
which Lhere exisLs a leqal connecLion
beLween Lhe counLerarLy and Lhe
underlyinq issuer, and for which
secific wronq way risk has been
idenLified, are noL considered Lo
be in Lhe sane neLLinq seL as oLher
LransacLions wiLh Lhe counLerarLy.
FurLhernore, for sinqle-nane
crediL defaulL swas where a leqal
connecLion exisLs beLween Lhe
counLerarLy and Lhe underlyinq issuer,
and where secific wronq way risk
has been idenLified, EA0 counLerarLy
exosure equals Lhe full execLed
loss in Lhe renaininq fair value of Lhe
underlyinq insLrunenLs assuninq Lhe
underlyinq issuer is in liquidaLion."
28

8.4 AsseL
value
correlaLion
8asel lll increases Lhe risk-weiqhLs
(PW} on exosures Lo financial
insLiLuLions relaLive Lo Lhe non-
financial cororaLe secLor in Lhe lP8
aroach. !he correlaLion coefficienL
in Lhe lP8 fornula is increased
by 26% for all exosures Lo larqe
requlaLed financial enLiLies and Lo
all unrequlaLed financial enLiLies.
24

ln effecL, a nulLilier of 1.26 is
inLroduced. !he roosals of Lhe Eb
PequlaLion consider insLiLuLions as
"larqe" if Lhe LoLal asseLs, on Lhe
level of LhaL individual firn or on Lhe
consolidaLed level of Lhe qrou, are
qreaLer Lhan or equal Lo EbP 70 billion
Lhreshold. !he 8asel lll docunenL by
Lhe 8C8S includes a Lhreshold of bS
$100 billion.
0eendinq on Lhe robabiliLy of
defaulL of Lhe insLiLuLion, Lhe
inLroducLion of Lhis nulLilier
increases Lhe risk-weiqhL by
aroxinaLely 20% Lo 86%. A deLailed
calculaLion is rovided in Lhe aendix
of Lhis handbook.
8.6 CenLral
counLer-
arLies
!he new caiLal franework also
enhances incenLives for clearinq
insLrunenLs Lhrouqh cenLral
counLerarLies (CCP} by alyinq lower
own funds requirenenLs relaLive Lo
0!C LransacLions. Also, Lhe addiLional
CvA caiLal charqe does noL aly
Lo exosures Lowards eliqible CCPs.
lL should be noLed LhaL several
condiLions need Lo be fulfilled Lo
classify as CCP.
While so far Lhere is no caiLal
charqe for derivaLives wiLh a CCP Lhe
roosed Eb PequlaLion inLroduces
own funds requirenenLs for Lrade
exosures. Accordinq Lo Lhis an
insLiLuLion has Lo aly a risk-weiqhL
of 2% Lo Lhe exosure values of all
iLs Lrade exosures wiLh CCPs. An
exosure value of zero can be used in
cases where Lhe osLed collaLerals Lo a
CCP or a clearinq nenber bankruLcy
are renoLe evenLs, or if Lhe CCP, Lhe
clearinq nenber or one or nore of Lhe
oLher clienLs of Lhe clearinq nenber
becones insolvenL.
ln addiLion Lo insLiLuLions acLinq as
clearinq nenbers, Lhey have Lo hold
own funds Lo cover Lhe exosures
arisinq fron Lheir conLribuLions
Lo Lhe defaulL fund of a CCP, Lhe
corresondinq neLhodoloqy is
secified in ArLicle 208 of Lhe
roosed Eb PequlaLion.
8. Enhanced
CCP
nanaqenenL
requirenenLs
8asel lll sLrenqLhens noL only Lhe
CCP neasurenenL buL also Lhe CCP
nanaqenenL by requirinq insLiLuLions
Lo esLablish and nainLain a CCP
nanaqenenL franework consisLinq of:
+\ Policies, rocesses and sysLens
Lo ensure Lhe idenLificaLion,
neasurenenL, nanaqenenL, aroval
and inLernal reorLinq
of CCP;
,\ Procedures for ensurinq LhaL Lhose
olicies, rocesses and sysLens are
conlied wiLh.
!he franework should ensure LhaL
insLiLuLions conly wiLh Lhe followinq
rinciles:
+\ lL does noL underLake business wiLh
a counLerarLy wiLhouL assessinq iLs
crediLworLhiness;
,\ lL Lakes due accounL of seLLlenenL
and re-seLLlenenL crediL risk;
7\ lL nanaqes such risks as
conrehensively and racLicable aL Lhe
counLerarLy level by aqqreqaLinq CCP
exosures wiLh oLher crediL exosures
and aL Lhe firn-wide level.
8asel lll also includes new
requirenenLs for CCP back LesLinq
and sLress LesLinq. 8anks nusL have
a conrehensive sLress LesLinq
roqran includinq reqular execuLion,
sinqle- and nulLi-facLor LesLs, Lrade
coveraqe and inLernal conLrol. ln
addiLion, new requirenenLs for
collaLeral nanaqenenL and olicies
are sLiulaLed. !he requlaLory floor for
Lhe narqin eriod of risk will increase,
deendinq on Lhe counLerarLy
orLfolio and hisLoric narqin
call failures.
4
Leveraqe raLio
80
81
!o revenL an excessive build-u
of leveraqe on insLiLuLions' balance
sheeLs, 8asel lll inLroduces a non-risk-
based leveraqe raLio Lo sulenenL
Lhe risk-based caiLal franework of
8asel ll. !his new requlaLory Lool is noL
inLended Lo be a bindinq insLrunenL aL
Lhis sLaqe buL as an "addiLional feaLure
LhaL can be alied on individual
banks aL Lhe discreLion of suervisory
auLhoriLies wiLh a view Lo niqraLinq
Lo a bindinq ('Pillar one'} neasure in
2018, based on aroriaLe review and
calibraLion."
26
PeorLinq requirenenLs
fron January 1, 2018 would allow a
corresondinq review and decision
on iLs inLroducLion as a bindinq
requirenenL in 2018. SLarLinq in 2016,
ublicaLion of Lhe leveraqe raLio by Lhe
insLiLuLions is roosed.
2

!he leveraqe raLio should be calculaLed
by dividinq an insLiLuLion's caiLal
neasure by Lhe LoLal exosure
(exressed as a ercenLaqe}. !he raLio
should be calculaLed as Lhe sinle
ariLhneLic nean of Lhe nonLhly
leveraqe raLios over a quarLer.
27

For Lhe nuneraLor of Lhe raLio (caiLal
neasure}, Lhe !ier 1 caiLal should
be considered. !he denoninaLor
(exosure neasure} should be Lhe
sun of Lhe exosure values of all
asseLs and off-balance sheeL iLens
noL deducLed fron Lhe calculaLion of
!ier 1 caiLal. For off-balance-sheeL
iLens, a secific crediL risk ad|usLnenL
of 10% qenerally alies for undrawn
crediL faciliLies, (Lhis nay be cancelled
uncondiLionally aL any Line wiLhouL
noLice}, and 100% for all oLher off-
balance-sheeL iLens.
28

AL Lhis Line a leveraqe raLio of 8%
is roosed. 8y 0cLober 81, 201,
Lhe E8A will reorL Lo Lhe Euroean
Connission anonq oLhers on wheLher
8% would be an aroriaLe level for a
!ier 1 caiLal-based leveraqe raLio and
wheLher Lhe leveraqe raLio should be
Lhe sane for all insLiLuLions or differ
for various Lyes of insLiLuLions. 8ased
on Lhe E8A reorL, final ad|usLnenLs
of Lhe raLio would be nade in Lhe firsL
half of 2017. !he E8A would develo
drafLs of Lechnical sLandards Lo
deLernine Lhe conLenLs and fornaL of
Lhe uniforn reorLinq LenlaLe.
WiLhin Lhe disclosure requirenenLs,
Lhe followinq infornaLion should be
reorLed:
+\ !he leveraqe raLio;
,\ A breakdown of Lhe LoLal exosure
neasure;
7\ A descriLion of Lhe rocesses
used Lo nanaqe Lhe risk of excessive
leveraqe;
6\ A descriLion of Lhe facLors LhaL
had an inacL on Lhe leveraqe raLio
durinq Lhe eriod Lo which Lhe
disclosed leveraqe raLio refers.
!"#$%& )Y R&/&%+#& N+0"1 ?"0L"2 X+'&- 555
!"#"$%&" (%)*+
,*"$ - .%/*)%0
,+)%0 "1/+23$"
4 56
Exosure neasure qenerally follows
accounLinq neasure
CrediL risk ad|usLenenL for
off-balance-sheeL iLens:
- 6enerally 100%
- 10% for uncondiLionally
cancellable conniLnenLs
7%0.30%)*+8
Sinle ariLhneLic nean of Lhe nonLhly leveraqe raLio over Lhe quarLer
9.+/" +: %//0*.%)*+8
Solo, consolidaLed and sub-consolidaLed level
;*2.0+23$"
0isclosure of Lhe key elenenLs of Lhe leveraqe raLio under Pillar 8
<8)$+=3.)*+8
Planned for Jan. 1, 2018
,$%82*)*+8 /"$*+=
Jan. 1, 2011: SLarL suervisory noniLorinq eriod (develonenL of LenlaLes}
Jan. 1, 2018 - Jan. 1, 2017: Parallel run (leveraqe raLio and iLs cononenLs will be Lracked, includinq iLs behavior relaLive Lo
Lhe risk based requirenenL}
Jan. 1, 2016: 0isclosure of Lhe leveraqe raLio by banks
FirsL half of 2017: Final ad|usLnenLs
Jan. 1, 2018: MiqraLion Lo Pillar 1 LreaLnenL
Source: AccenLure
4.1 0efiniLion and calibraLion
82
88
6
6lobal liquidiLy sLandard
84
86
8asel lll includes a new liquidiLy sLandard inLroducinq
Lwo liquidiLy raLios. !he LiquidiLy Coveraqe PaLio (LCP}
is inLroduced Lo inrove Lhe shorL-Lern resilience of
Lhe liquidiLy risk rofile of insLiLuLions, requirinq Lhen
Lo hold a buffer of "hiqh qualiLy" liquid asseLs Lo naLch
neL liquidiLy ouLflows durinq a 80-day eriod of sLress.
!he heL SLable Fundinq PaLio (hSFP} is desiqned Lo
ronoLe resilience over Lhe lonqer Lern by requirinq
insLiLuLions Lo fund Lheir acLiviLies wiLh nore sLable
sources of fundinq on an onqoinq sLrucLural basis.
FurLher, E8A will develo drafL
inlenenLaLion Lechnical sLandards
reqardinq liquidiLy noniLorinq neLrics
which should allow coneLenL
auLhoriLies Lo obLain a conrehensive
view of Lhe liquidiLy risk rofiles of
insLiLuLions. !he 8asel lll docunenL
fron Lhe 8C8S conLains a nunber of
noniLorinq Lools which are resenLed
in secLion 6.8.
lL should be noLed LhaL insLiLuLions
are noL only execLed Lo neeL Lhe
new sLandards buL also Lo adhere
Lo Lhe Princiles for Sound LiquidiLy
Pisk ManaqenenL and Suervision.
20

!hese rinciles rovide quidance on
Lhe risk nanaqenenL and suervision
of liquidiLy and fundinq risk and have
been considered in Lhe conLexL of Lhe
CP0 ll. !he followinq fiqure qives an
overview of Lhe relevanL Loics.
!"#$%& 3Y R"M$"6"0H %"'I A+2+#&A&20 [RNG\ ;%+A&?1%I
Source: AccenLure
!"#$%&'&($
LiquidiLy risk Lolerance
PesonsibiliLy senior nanaqenenL
Pricinq of liquidiLy cosLs
)$'*+%$,$&- '&/ ,'&'0$,$&-
LiquidiLy risk nanaqenenL (LPM} rocess
6rou-wide ersecLive
Fundinq sLraLeqy
lnLraday liquidiLy osiLions
CollaLeral osiLions
SLress LesLinq
ConLinqency fundinq lan
Riqh qualiLy liquid asseLs
1+234( /4*(3"*+%$
0isclosure
5"3$ "6 *+7$%#4*"%*
AssessnenL LPM franework
MoniLorinq
EffecLivejLinely inLervenLion
ConnunicaLion wiLh oLher suervisors
8+&/',$&-'3 7%4&(473$
A bank should esLablish a robusL liquidiLy risk nanaqenenL
franework LhaL ensures iL nainLains sufficienL liquidiLy
!"#$%&'&($ )$'*+%$,$&-
'&/ ,'&'0$,$&-
94:+4/4-; %4*<
,'&'0$,$&- 6%',$="%<
1+234( /4*(3"*+%$
8+&/',$&-'3 7%4&(473$ 6"% ->$ ,'&'0$,$&-
'&/ *+7$%#4*4"& "6 34:+4/4-; %4*<
5"3$ "6
*+7$%#4*"%*
8
!"#$%& 8Y R"M$"6"0H @1/&%+#& N+0"1 [R@N\
Source: AccenLure
!"#
$%&' )*+,%-. ,%)*%/ +001-0
23-+, 41- ,%)*%/%-. 3*-5,360
3718 9:;/+. -%<1 =18%3/
> 100%
!"#$%$&$%'"# )*+, $' ,"#&-, $)*$ $),. )*+,
*$ *// $%0,# #&11%2%,"$ )%3) 4&*/%$. /%4&%5
*##,$# $' #&-+%+, *" *2&$, #$-,## #2,"*-%'
/*#$%"3 1'- 67 5*.#
?4-83/*@-%34
8*"9 :; <7:=> '?#,-+*$%'" @,-%'5 #$*-$%"3 8*"9 :; <7:6
A@3=1 35 +==,%@+-%34
A,+,/ '1 %"5%+%5&*/ %"#$%$&$%'" BC%$) /,3*/ @,-#'"*/%$.D
#1=38-%4&
E'"$)/. C%$) $), '@,-*$%'"*/ 2*@*2%$. $' %"2-,*#, $), 1-,4&,"2. $' C,,F/. '- ,+," 5*%/. %" #$-,##,5 #%$&*$%'"#
B%0@,30*81
G%#2/'#&-, '1 AHI &"5,- J%//*- 6
6.1 LiquidiLy Coveraqe PaLio
87
!he LiquidiLy Coveraqe PaLio (LCP}
requires insLiLuLions Lo hold a
sufficienL buffer of "hiqh qualiLy"
liquid asseLs Lo cover neL liquidiLy
ouLflows durinq a 80-day eriod of
sLress. !he sLock of hiqh qualiLy liquid
asseLs (nuneraLor} should include
asseLs of hiqh crediL and liquidiLy
qualiLy. !he sLress scenario LhaL is
used Lo deLernine Lhe neL cash
ouLflows (denoninaLor} reflecLs
boLh insLiLuLion-secific and
sysLenic shocks.
80

!he LCP will be inLroduced by 2016
afLer an observaLion eriod Lo avoid
ossible uninLended consequences.
Fron 2018 on, Lhere is a qeneral
requirenenL for banks Lo kee
aroriaLe liquidiLy coveraqe.
Accordinq Lo Lhe roosed Eb
PequlaLion, Lhe LCP will in rincile
aly aL Lhe level of every individual
insLiLuLion (wiLh leqal ersonaliLy}.
ConeLenL auLhoriLies nay - sub|ecL
Lo sLrinqenL condiLions - waive
Lhe alicaLion Lo a consolidaLed
requirenenL.
81
!o neeL Lhe requirenenL, insLiLuLions
shall "aL all Lines hold liquid asseLs,
Lhe sun of Lhe values of which
equals, or is qreaLer Lhan, Lhe liquidiLy
ouLflows less Lhe liquidiLy inflows
under sLressed condiLions so as Lo
ensure LhaL insLiLuLions nainLain levels
of liquidiLy buffers which are adequaLe
Lo face any ossible inbalance
beLween liquidiLy inflows and ouLflows
under sLressed condiLions over a shorL
eriod of Line. lnsLiLuLions shall noL
counL double liquidiLy inflows and
liquid asseLs."
82

lf an insLiLuLion does noL neeL Lhe
requirenenLs, iL is asked Lo noLify Lhe
coneLenL auLhoriLies and subniL
a lan for Lhe Linely resLoraLion of
conliance wiLh Lhe LCP requirenenL.
bnLil Lhe insLiLuLion has resLored
conliance, iL nusL reorL Lhe iLens Lo
Lhe coneLenL auLhoriLies on a daily
basis.
!he LCP should be reorLed on a
nonLhly basis. ConeLenL auLhoriLies
nay auLhorize a lower reorLinq
frequency on Lhe basis of Lhe
individual siLuaLion of an insLiLuLion.
ConeLenL auLhoriLies niqhL also
require insLiLuLions wiLh siqnificanL
liquidiLy risk in a foreiqn currency Lo
reorL Lhese iLens searaLely.
88
3=4=4= :&;"2"0"12 1; L"#LV
M$+-"0H -"M$"6 +''&0'
!he followinq iLens should qualify as
liquid asseLs:
+\ Cash and deosiLs held wiLh
cenLral banks Lo Lhe exLenL LhaL Lhese
deosiLs can be wiLhdrawn in Lines
of sLress;
,\ !ransferable asseLs LhaL are of
exLrenely hiqh liquidiLy and
crediL qualiLy;
7\ !ransferable asseLs reresenLinq
clains on or quaranLeed by Lhe cenLral
qovernnenL of a Menber SLaLe or a
Lhird counLry if Lhe insLiLuLion incurs a
liquidiLy risk in LhaL Menber SLaLe or
Lhird counLry LhaL iL covers by holdinq
Lhose liquid asseLs;
6\ !ransferable asseLs LhaL are of hiqh
liquidiLy and crediL qualiLy.
As an oeraLional requirenenL, iLens
lisLed in oinLs a, b and c (also called
"level 1 asseLs"} should noL be less
Lhan 0% of Lhe liquid asseLs of an
insLiLuLion. Such iLens owed and due
or callable wiLhin 80 calendar days
shall noL counL Lowards 0% unless
Lhe asseLs have been obLained aqainsL
collaLeral LhaL qualifies under oinLs
a, b or c.
Peqardinq Lhe definiLion of "hiqh"
and "exLrenely hiqh" liquidiLy and
crediL qualiLy of Lransferable asseLs,
E8A will work on a uniforn definiLion
unLil 0ecenber 81, 2018, considerinq
Lhe followinq criLeria: nininun Lrade
volune of Lhe asseLs; crediL qualiLy
sLes; averaqe volune Lraded and
averaqe Lrade size; renaininq Line
Lo naLuriLy. bnLil Lhen, insLiLuLions
Lhenselves should idenLify Lhe
corresondinq Lransferable asseLs LhaL
are of hiqh or exLrenely hiqh liquidiLy
and crediL qualiLy.
lnsLiLuLions should noL consider Lhe
followinq iLens as hiqh qualiLy
liquid asseLs:
+\ asseLs LhaL are issued by a crediL
insLiLuLion unless Lhey fulfill one of Lhe
followinq condiLions:
"\ !hey are bonds eliqible for LreaLnenL
as covered bonds;
""\ !hey are bonds as defined in ArLicle
62(4} of 0irecLive 2000j6jEC
88
oLher
Lhan Lhose referred Lo in (i};
"""\ !he crediL insLiLuLion has been
seL u and is sonsored by a Menber
SLaLe cenLral or reqional qovernnenL
and Lhe asseL is quaranLeed by
LhaL qovernnenL and used Lo fund
ronoLional loans qranLed on a
non-coneLiLive, noL-for-rofiL basis
in order Lo ronoLe iLs ublic olicy
ob|ecLives;
,\ AsseLs issued by any of
Lhe followinq:
"\ An invesLnenL firn;
""\ An insurance underLakinq;
"""\ A financial holdinq conany;
"/\ A nixed-acLiviLy holdinq conany;
/\ Any oLher enLiLy LhaL erforns
one or nore of Lhe acLiviLies lisLed
in Annex l of Lhe 0irecLive as iLs
nain business (e.q., financial leasinq;
acceLance of deosiLs and oLher
nuLual recoqniLion}.
!he iLens shall fulfill Lhe followinq
condiLions Lo qualify as hiqh qualiLy
liquid asseLs:
+\ !hey are noL issued by Lhe
insLiLuLion iLself or iLs arenL or
subsidiary insLiLuLions or anoLher
subsidiary of iLs arenL insLiLuLions or
arenL financial holdinq conany;
,\ !hey are eliqible collaLeral in nornal
Lines for inLraday liquidiLy needs
and overniqhL liquidiLy faciliLies of a
cenLral bank in a Menber SLaLe or,
if Lhe liquid asseLs are held Lo neeL
liquidiLy ouLflows in Lhe currency of
a Lhird counLry, of Lhe cenLral bank of
LhaL Lhird counLry;
c} !heir rice can be deLernined by a
fornula LhaL is easy Lo calculaLe based
on ublicly available inuLs and does
noL deend on sLronq assunLions as
is Lyically Lhe case for sLrucLured or
exoLic roducLs;
6\ !hey are lisLed on a recoqnized
exchanqe;
&\ !hey are Lradable on acLive ouLriqhL
sale or reurchase aqreenenL narkeLs
wiLh a larqe and diverse nunber of
narkeL arLicianLs, a hiqh Lradinq
volune and narkeL breadLh and deLh.
lLens have Lo fulfill several oeraLional
requirenenLs Lo be considered as hiqh-
qualiLy liquid asseLs:
+\ !hey are aroriaLely diversified;
,\ "Level 1 asseLs" should noL be less
Lhan 0% of Lhe liquid asseLs (see
above};
7\ !hey are leqally and racLically
readily available aL any Line durinq
Lhe nexL 80 days Lo be liquidaLed via
ouLriqhL sale or reurchase aqreenenLs
in order Lo neeL obliqaLions
coninq due;
6\ !he liquid asseLs are conLrolled by a
liquidiLy nanaqenenL funcLion;
&\ A orLion of Lhe liquid asseLs is
eriodically and aL leasL annually
liquidaLed via ouLriqhL sale or
reurchase aqreenenLs for Lhe
followinq uroses:
"\ !o LesL Lhe access Lo Lhe narkeL for
Lhese asseLs,
""\ !o LesL Lhe effecLiveness of iLs
rocesses for Lhe liquidaLion of asseLs,
"""\ !o LesL Lhe usabiliLy of Lhe asseLs,
"/\ !o nininize Lhe risk of neqaLive
siqnalinq durinq a eriod of sLress;
!"#$%& JY R@NY ]"#L M$+-"0H -"M$"6 +''&0'
Source: AccenLure
80
;\ Price risks associaLed wiLh Lhe
asseLs nay be hedqed buL Lhe liquid
asseLs are sub|ecL Lo aroriaLe
inLernal arranqenenLs LhaL ensure LhaL
Lhey will noL be used in oLher onqoinq
oeraLions, includinq:
"\ Redqinq or oLher Lradinq sLraLeqies;
""\ Providinq crediL enhancenenLs in
sLrucLured LransacLions;
"""\ !o cover oeraLional cosLs;
#\ !he denoninaLion of Lhe liquid
asseLs is consisLenL wiLh Lhe
disLribuLion by currency of liquidiLy
ouLflows afLer Lhe deducLion of
caed inflows.
!he value of Lhe liquid asseLs shall
be Lhe narkeL value, sub|ecL Lo
aroriaLe haircuLs. For level 2 asseLs
Lhe haircuL shall noL be less Lhan 16%.
lf insLiLuLions hedqe Lhe rice risk,
Lhey should Lake inLo accounL Lhe
cash flow resulLinq fron Lhe oLenLial
close-ouL of Lhe hedqe. Shares or uniLs
in Clbs should be sub|ecL Lo haircuLs,
lookinq Lhrouqh Lo Lhe underlyinq
asseLs. !he haircuLs ranqe fron 0%
Lo 20%.
!"#
$%&' )*+,%-. ,%)*%/ +001-0
23-+, 41- ,%)*%/%-. 3*-5,360
3718 9:;/+. -%<1 =18%3/
> 100%
$%&' )*+,%-. ,%)*%/ +001-0
"34/%-%340 '%&' )*+,%-. ,%)*%/ +001-0 ?1@&@AB
hoL issued by Lhe insLiLuLion or arenLjsubsidiary
EliqibiliLy as collaLeral in nornal Lines for inLraday liquidiLy needs and overniqhL liquidiLy faciliLies of a CenLral 8ank
LisLed on a recoqnized exchanqe
C=18+-%34+, 81)*%81<14-0 ?1@&@AB
AroriaLe diversificaLion
AsseLs are leqally and racLically readily available aL any Line durinq Lhe nexL 80 days
Liquid asseLs are conLrolled by a liquidiLy nanaqenenL funcLion
$%&' )*+,%-. ,%)*%/ +001-0 %-1<0
"Level 1 asseLs" (cash; Lransferable asseLs of exLrenely hiqh liquidiLy and crediL qualiLy}: nin. 0% of liquid asseLs; narkeL
value; no haircuL
"Level 2 asseLs" (Lransferable asseLs LhaL are of hiqh liquidiLy and crediL qualiLy}: nax. 40% of liquid asseLs; narkeL value;
haircuL of nin. 16%
40
3=4=9= :&;"2"0"12 1; 2&0
-"M$"6"0H 1$0;-1?'
!he denoninaLor of Lhe LCP consisLs
of Lhe neL liquidiLy ouLflows over
a 80-day eriod of sLress. !hey are
calculaLed as Lhe liquidiLy inflows
ninus Lhe ouLflows, whereas Lhe
inflows are liniLed Lo 76% of liquidiLy
ouLflows.
!he liquidiLy ouLflows are calculaLed
by nulLilyinq Lhe asseLs wiLh Lhe
secified "run off" facLors; Lhe inflows,
by nulLilyinq Lhe asseLs wiLh Lhe
secified inflow facLor.
6.1.2.1 LiquidiLy ouLflows
LiquidiLy ouLflows are calculaLed as
Lhe sun of Lhe followinq iLens:
+\ 6% of reLail deosiLs LhaL are
covered by a 0eosiL 6uaranLee
Schene and Lhe deosiLor is eiLher:
"\ ParL of an esLablished relaLionshi
nakinq wiLhdrawal hiqhly unlikely;
""\ held in a LransacLional accounL,
includinq accounLs Lo which salaries
are reqularly crediLed;
10% of oLher reLail deosiLs;
84

,\ For oLher liabiliLies LhaL cone due,
can be called for ayouL, or enLail an
inliciL execLaLion of Lhe rovider of
Lhe fundinq LhaL Lhe insLiLuLion would
reay Lhe liabiliLy durinq Lhe nexL 80
days, Lhe followinq ercenLaqes should
be used Lo calculaLe liquidiLy ouLflows:
"\ 0% of Lhe liabiliLies resulLinq
fron Lhe insLiLuLion's own oeraLinq
exenses;
""\ 0% of liabiliLies resulLinq fron
secured lendinq and caiLal-
narkeL-driven LransacLions which
are collaLeralized wiLh hiqh qualiLy
liquid asseLs (u Lo Lhe value of Lhe
liquid asseLs}; 100% of Lhe renaininq
liabiliLies;
"""\ 26% of liabiliLies resulLinq fron
secured lendinq and caiLal-narkeL-
driven LransacLions if Lhe asseLs would
noL qualify as liquid asseLs, Lhe lender
is Lhe cenLral bank or anoLher ublic
!"#
$%&' )*+,%-. ,%)*%/ +001-0
23-+, 41- ,%)*%/%-. 3*-5,360
3718 9:;/+. -%<1 =18%3/
> 100%
?1- ,%)*%/%-. 3*-5,360 >
!%)*%/%-. 3*-5,360 @ A%4 B!%)*%/%-. %45,360C DEF 35 ,%)*%/%-. 3*-5,360G
?1- ,%)*%/%-. 3*-5,360
!"#$"%"&' )$&*+),- ."/$- +"#$"%"&' "/*+),- "/ &01 -&21-- -31/42")
501 -31/42") "/3+$%1- *"2.6-713"*"3 4/% -'-&1."3 *43&)2-
"+,H*,+-%34 ,%)*%/%-. 3*-5,360
8$+&"7+"34&")/ )* &01 "&1.- ,"&0 &01 21-713&"91 :2$/ )**: *43&)2
"+,H*,+-%34 ,%)*%/%-. %45,360
8$+&"7+"34&")/ )* &01 "&1.- ,"&0 &01 -713"*"1% "/*+), *43&)2;
"/*+),- 421 34771% 4& <=> )* &01 )$&*+),-
!"#$%& BY R@NY >&0 -"M$"6"0H 1$0;-1?'
Source: AccenLure
secLor enLiLy of Lhe Menber SLaLe
in which Lhe crediL insLiLuLion was
auLhorized.
"/\ For liabiliLies resulLinq fron
deosiLs LhaL have Lo be nainLained:
[+\ 8y Lhe deosiLor in order Lo obLain
clearinq, cusLody or cash nanaqenenL
services fron Lhe insLiLuLion;
[,\ ln Lhe conLexL of connon Lask
sharinq wiLhin an insLiLuLional
roLecLion schene or as a leqal or
sLaLuLory nininun deosiL by anoLher
enLiLy beinq a nenber of Lhe sane
insLiLuLional roLecLion schene;
6% in case of oinL a} Lo Lhe exLenL Lo
which Lhey are covered by a 0eosiL
6uaranLee Schene or an equivalenL
deosiL quaranLee schene in a Lhird
counLry, and by 26% oLherwise;
/\ 76% of liabiliLies resulLinq fron
deosiLs by clienLs LhaL are noL
financial cusLoners
/"\ 100% of ayables and receivables
execLed over Lhe 80-day horizon
fron Lhe conLracLs lisLed in Annex
ll inLo accounL on a neL basis across
counLerarLies;
/""\ 100% of oLher liabiliLies.
7\ CollaLeral oLher Lhan "level 1" asseLs
which is osLed by Lhe insLiLuLion for
conLracLs lisLed in Annex ll shall be
sub|ecL Lo an addiLional ouLflow of
16% of Lhe narkeL value of asseLs for
"level 2" asseLs and 20% of Lhe narkeL
value of oLher asseLs;
6\ 0uLflows fron crediL and liquidiLy
faciliLies LhaL qualify as nediun or
nediun-Lo-low risk, which shall be
deLernined as a ercenLaqe of Lhe
naxinun anounL LhaL can be drawn
durinq Lhe nexL 80 days. !he naxinun
anounL should be nulLilied by:
"\ 6% if Lhe faciliLies qualify for
Lhe reLail exosure class under Lhe
sLandardized or lP8 aroaches for
crediL risk;
41
""\ 10% if Lhey do noL qualify for
reLail exosure; have been rovided
Lo clienLs LhaL are noL financial
cusLoners; have noL been rovided for
Lhe urose of relacinq fundinq of Lhe
clienL in siLuaLions when Lhe clienL is
unable Lo obLain fundinq requirenenLs
in Lhe financial narkeLs;
"""\ 100% alies in arLicular Lo (a}
liquidiLy faciliLies LhaL Lhe insLiLuLion
has qranLed Lo securiLizaLion secial
urose enLiLy (SSPEs}; and (b}
arranqenenLs under which Lhe
insLiLuLion is required Lo buy or swa
asseLs fron an SSPE.
&\ AddiLional ouLflows in eriod of
sLress.
86

6.1.2.2 LiquidiLy inflows
lnsLiLuLions should neasure liquidiLy
inflows over Lhe nexL 80 days. !hey
are liniLed Lo 76% of Lhe liquidiLy
ouLflows and should include only
conLracLual inflows fron exosures
LhaL are noL asL due and for which
Lhe bank has no reason Lo execL non-
erfornance wiLhin 80 days. LiquidiLy
inflows should be Laken inLo accounL
in full wiLh Lhe followinq exceLions:
a} Monies due fron cusLoners LhaL
are noL financial cusLoners shall be
reduced by 60% (Lhis does noL aly
Lo nonies due fron secured lendinq
and caiLal-narkeL-driven LransacLions
LhaL are collaLeralized by "level 1" and
"level 2" asseLs};
b} Monies due fron secured
lendinq and caiLal-narkeL-driven
LransacLions, if Lhey are collaLeralized
by liquid asseLs, shall noL be Laken inLo
accounL u Lo Lhe value neL of haircuLs
of Lhe liquid asseLs buL shall be Laken
inLo accounL in full for Lhe renaininq
nonies due;
c} Monies due LhaL Lhe insLiLuLion
owinq Lhose nonies LreaLs, any
undrawn crediL or liquidiLy faciliLies
and any oLher conniLnenLs received
shall noL be Laken inLo accounL.
Payables and receivables execLed
over Lhe 80-day horizon fron Lhe
conLracLs lisLed in Annex ll shall
be reflecLed on a neL basis across
counLerarLies and shall be nulLilied
by 100% of a neL anounL receivable.
lnsLiLuLions should noL consider
inflows fron any of Lhe liquid
asseLs (as secified in Lhe roosed
PequlaLion} oLher Lhan aynenLs due
on Lhe asseLs LhaL are noL reflecLed in
Lhe narkeL value of Lhe asseL.
FurLher inflows fron new issuance of
any obliqaLions should noL be Laken
inLo accounL.
lnsLiLuLions shall Lake inLo accounL
liquidiLy inflows which are Lo be
received in Lhird counLries where
Lhere are Lransfer resLricLions or which
are denoninaLed in non-converLible
currencies only Lo Lhe exLenL LhaL Lhey
corresond Lo ouLflows in Lhe Lhird
counLry or currency in quesLion.
!"#$"%"&' )*+,-./, 0.&"*
!)0
1"/2 #$.3"&' 3"#$"% .44,&4
5*&.3 6,& 3"#$"%"&' *$&73*84
*+,- 9:;%.' &"<, =,-"*%
> 100%
100%
1"/2 #$.3"&' 3"#$"% .44,&4
"Lcvc| 1" asscIs
"#$%& '(#)$*+(#,-+ #$$+'$ .* +/'(+0+-1 %23% -245262'1 #)6 7(+62' 45#-2'1 802)9 :;< .* -24526 #$$+'$=
"Lcvc| 2" asscIs
>(#)$*+(#,-+ #$$+'$ '%#' #(+ .* %23% -245262'1 #)6 7(+62' 45#-2'1? 0#/9 @;< .* -24526 #$$+'$& 0#(A+' B#-5+&
%#2(75' .* 02)9 CD<
!"#$"%"&' "673*84
Monies due fron non financial cusLoner (60%}
Secured lendinq and caiLal narkeL driven
'(#)$#7'2.)$ 8;<EC;;<=
bndrawn crediL and liquidiLy faciliLies (0%}
Secified ayables and receivables execLed over
'%+ F; 6#1 %.(2G.) 8C;;<=
Liquid asseLs (0%}
hew issuance of obliqaLions (0%}
!"#$"%"&' *$&73*84
PeLail deosiLs (6-10%}
0Lher liabiliLies coninq due durinq nexL
F; 6#1$ 8;EC;;<=
CollaLeral oLher Lhan "level 1" asseLs
8CDEH;<=
CrediL and liquidiLy faciliLies (6-100%}
!"#$%& CY R@NY ]"#L M$+-"0H -"M$"6 +''&0' +26 2&0 -"M$"6"0H 1$0;-1?'
Source: AccenLure
42
!he heL SLable Fundinq PaLio (hSFP}
requires insLiLuLions Lo nainLain a
sound fundinq sLrucLure over one year
in an exLended firn-secific sLress
scenario. AsseLs currenLly funded and
any conLinqenL obliqaLions Lo fund
nusL be naLched Lo a cerLain exLenL
by sources of sLable fundinq. !he
nininun requirenenL described in
nore deLail below is Lo be inLroduced
by January 1, 2018. !here is an
observaLion eriod unLil Lhen.
!he reorLinq frequency for Lhe LCP
should noL be less Lhan nonLhly. !he
hSFP should be reorLed noL less
Lhan quarLerly. ConeLenL auLhoriLies
are allowed Lo auLhorize a lower
reorLinq frequency on Lhe basis of Lhe
individual siLuaLion of an insLiLuLion.
!he nuneraLor of Lhe hSFP includes
Lhe sLable sources of fundinq. !he
followinq iLens shall be reorLed Lo
coneLenL auLhoriLies searaLely in
order Lo allow an assessnenL of Lhe
availabiliLy of sLable fundinq:
+\ 0wn funds;
,\ !he followinq iLens noL included in
Lhe own funds:
"\ PeLail deosiLs as defined in Lhe
PequlaLion;
""\ 0eosiLs LhaL fulfill cerLain
condiLions;
"""\ All fundinq obLained fron financial
cusLoners;
"/\ Fundinq fron secured lendinq as
secified in Lhe PequlaLion;
/\ LiabiliLies resulLinq fron covered
bonds;
/"\ 0Lher liabiliLies resulLinq fron
securiLies issued;
/""\ Any oLher liabiliLies.
!he iLens shall be resenLed in Lhe
followinq five Line blocks accordinq Lo
naLuriLy daLe or Lhe earliesL daLe Lhey
can be conLracLually called:
a} WiLhin 8 nonLhs;
,\ 8eLween 8 and nonLhs;
7\ 8eLween and 0 nonLhs;
6\ 8eLween 0 and 12 nonLhs;
&\ AfLer 12 nonLhs.
!he denoninaLor of Lhe hSFP includes
Lhe iLens requirinq sLable fundinq.
lnsLiLuLions shall reorL Lhe followinq
iLens Lo coneLenL auLhoriLies in
order Lo allow an assessnenL of Lhe
need for sLable fundinq:
a} Liquid asseLs, broken down by
asseL Lye;
b} SecuriLies and noney narkeL
insLrunenLs noL included in (a};
c} EquiLy securiLies of non-financial
enLiLies lisLed on a na|or index in a
recoqnized exchanqe;
d} 0Lher equiLy securiLies;
e} 6old;
f} 0Lher recious neLals;
#\ hon-renewable loans and
receivables, and searaLely, Lhose Lhe
borrowers of which are:
"\ haLural ersons oLher Lhan
connercial sole rorieLor and
arLnershis and deosiLs laced by
snall and nediun-size enLerrises
where Lhe aqqreqaLe deosiL laced
by LhaL clienL or qrou of connecLed
clienLs is less Lhan 1 nillion EbP;
""\ Sovereiqns, cenLral banks and PSEs;
"""\ ClienLs noL referred Lo in (i} and (ii}
oLher Lhan financial cusLoners;
"/\ Any oLher borrowers;
L\ 0erivaLives receivables;
"\ Any oLher asseLs;
P\ bndrawn crediL faciliLies LhaL qualify
as 'nediun risk' or 'nediunjlow risk'.
Where alicable, all iLens shall
be reorLed in Lhe five Line blocks
described above.
!he roosed Eb PequlaLion does noL
include any "available sLable fundinq
facLors" (ASF facLors} or "required
sLable fundinq facLors" (PSF facLors},
i.e., facLors by which Lhe available
or required sLable fundinq iLens
nusL be nulLilied Lo calculaLe Lhe
corresondinq value. heiLher aL Lhis
Line is iL sLaLed wheLher Lhe hSFP
should be ">" or "" 100%.
8

!o qive an overview of Lhe currenL
discussion reqardinq ASF and PSF
facLors, Lhe followinq fiqures reresenL
Lhe roosals fron Lhe 8asel lll
docunenL of Lhe 8C8S.
87

6.2 heL SLable Fundinq PaLio
48
!"#$%& 44Y >T!NY ./+"-+,-& '0+,-& ;$26"2#
Source: AccenLure
hoLe: 8ased on 8asel lll docunenL fron 8asel ConniLLee on 8ankinq Suervision
Source: AccenLure
!"#$
%&'()'*)+ -.'*)+ /012(13
$+40(5+2 -.'*)+ /012(13
6 100%
71.58209.(81
!"#$ &' ()&*+ ,#-./ 012./3"450# ,#456 47.#
"98:+ 8/ '::)(9'.(81
8.3.6 09 5#-535-,"6 5#2454,450# :;547 6.<"6 =./20#"654>?
$+:85.(13
@,"/4./6>
;(-9)8-05+
A52B602,/. 09 CDEF ,#-./ G566"/ H
I#2454,450#2 "/. /.J,5/.- 40 K"5#4"5# "
20,#- 9,#-5#< 24/,B4,/. 03./ 0#. >."/
5# "# .L4.#-.- 95/KM2=.B595B 24/.22
2B.#"/50
!"#$%& 4FY >&0 T0+,-& !$26"2# N+0"1
44
Source: AccenLure
hoLe: 8ased on 8asel lll docunenL fron 8asel ConniLLee on 8ankinq Suervision
!"#$%& 49Y >T!NY N&M$"%&6 '0+,-& ;$26"2#
!"#$
%&'()'*)+ -.'*)+ /012(13
$+40(5+2 -.'*)+ /012(13
6 100%
$+40(5+2 -.'*)+ /012(13
7.+8- 9 $"# /':.;5 <=
Cash
bnencunbered shorL-Lern unsecured insLrunenLs and LransacLions wiLh ouLsLandinq naLuriLies < 1 year
bnencunbered securiLies wiLh sLaLed renaininq naLuriLies < 1 year wiLh no enbedded oLions
bnencunbered securiLies held where Lhe insLiLuLion has an offseLLinq reverse reurchase LransacLion
bnencunbered loans Lo financial enLiLies wiLh effecLive renaininq naLuriLies < 1 year LhaL are noL renewable and for which
Lhe lender has an irrevocable riqhL Lo call
7.+8- 9 $"# /':.;5 >=
bnencunbered narkeLable securiLies wiLh residual naLuriLies of one year or qreaLer reresenLinq clains on or clains
quaranLeed by sovereiqns, cenLral banks, 8lS, lMF, EC, non-cenLral qovernnenL PSEs or nulLilaLeral develonenL banks LhaL
are assiqned a 0% risk-weiqhL under Lhe 8asel ll sLandardized aroach, rovided LhaL acLive reo or sale-narkeLs exisL for
Lhese securiLies
7.+8- 9 $"# /':.;5 ?<=
bnencunbered cororaLe bonds or covered bonds raLed AA- or hiqher wiLh residual naLuriLies 1 year saLisfyinq all of Lhe
condiLions for Level 2 asseLs in Lhe LCP
bnencunbered narkeLable securiLies wiLh residual naLuriLies 1 year reresenLinq clains on or clains quaranLeed by
sovereiqns, cenLral banks, non-cenLral qovernnenL PSEs LhaL are assiqned a 20% risk-weiqhL under Lhe 8asel ll sLandardized
aroach, rovided LhaL Lhey neeL all of Lhe condiLions for Level 2 asseLs in Lhe LCP
7.+8- 9 $"# /':.;5 ><=
6old
bnencunbered equiLy securiLies, noL issued by financial insLiLuLions or Lheir affiliaLes, lisLed on a recoqnized exchanqe and
included in a larqe ca narkeL index
bnencunbered cororaLe bonds and covered bonds LhaL are cenLral bank eliqible and are noL issued by financial insLiLuLions
7.+8- 9 $"# /':.;5 @>=
bnencunbered residenLial norLqaqes of any naLuriLy LhaL would qualify for Lhe 86% or lower risk-weiqhL under 8asel ll
SLandardized Aroach
0Lher unencunbered loans, excludinq loans Lo financial insLiLuLions, wiLh a renaininq naLuriLy of one year or qreaLer, LhaL
would qualify for Lhe 86% or lower risk-weiqhL under 8asel ll SLandardized Aroach for crediL risk
7.+8- 9 $"# /':.;5 A>=
bnencunbered loans Lo reLail cusLoners and SME (as defined in Lhe LCP} havinq a renaininq naLuriLy < 1 year
7.+8- 9 $"# /':.;5 B<<=
All oLher asseLs noL included in Lhe above caLeqories
46
A furLher ob|ecLive of 8asel lll
is Lo sLrenqLhen and ronoLe
qlobal consisLency in liquidiLy
risk suervision. Accordinq Lo Lhe
roosed Eb PequlaLion, E8A shall
develo drafL inlenenLinq Lechnical
sLandards reqardinq addiLional
liquidiLy noniLorinq neLrics LhaL allow
coneLenL auLhoriLies Lo obLain a
conrehensive view of Lhe liquidiLy
rofile of insLiLuLions.
ln Lhe 8asel lll docunenL of Lhe 8C8S,
Lhe followinq noniLorinq Lools or
neLrics are roosed.
88

@120%+70$+- A+0$%"0H
A"'A+07L
ConLracLual cash and securiLy inflows
and ouLflows fron all on-and off-
balance sheeL iLens, naed Lo
defined Line bands based on Lheir
resecLive naLuriLies.
@127&20%+0"12 1; ;$26"2#
0ifferenL raLiosjfiqures
80
Lo hel
idenLify sources of wholesale fundinq
LhaL are of such siqnificance LhaL Lheir
wiLhdrawal could Lriqqer liquidiLy
roblens.
./+"-+,-& $2&27$A,&%&6
+''&0'
Available unencunbered asseLs
LhaL are narkeLable as collaLeral in
secondary narkeLs andjor eliqible for
cenLral banks' sLandinq faciliLies.
R@N ,H '"#2";"7+20 7$%%&27H
Foreiqn Currency LCP = SLock of hiqh-
qualiLy liquid asseLs in each siqnificanL
currencyjLoLal neL cash ouLflows
over a 80-day Line eriod in each
siqnificanL currency.
40

G+%I&0V%&-+0&6 A12"01%"2#
011-'
Early warninq indicaLors based
on hiqh-frequency narkeL daLa
wiLh liLLle or no Line laq (narkeL
wide infornaLion; infornaLion on
Lhe financial secLor; bank-secific
infornaLion}.
6.8 MoniLorinq Lools
For insLiLuLional neLworks, Lhe 8asel
lll franework includes Lhe followinq
secial LreaLnenLs relaLinq Lo Lhe
calculaLion of Lhe LCP and hSFP.
+\ R@NY For calculaLinq liquidiLy
ouLflows, qenerally a "run off"
facLor of 100% should be alied for
unsecured wholesale fundinq. ln case
of connon Lask sharinq wiLhin an
insLiLuLional roLecLion schene or as a
leqal or sLaLuLory nininun deosiL by
anoLher enLiLy beinq a nenber of Lhe
sane insLiLuLional roLecLion schene,
a facLor of 26% can be used by Lhe
cenLralized insLiLuLion.
For deosiLs held aL Lhe cenLralized
insLiLuLion in a cooeraLive bankinq
neLwork LhaL are assuned Lo sLay
aL Lhe cenLralized insLiLuLion, Lhe
deosiLinq bank should noL counL
any inflow for Lhese funds. !hey will
receive a 0% inflow raLe (by Lhe
deosiLinq bank}.
,\ >T!NY As reviously nenLioned,
Lhe roosed Eb PequlaLion does
noL include any secific ASF and
PSF facLors. Accordinq Lo Lhe 8C8S
docunenL for liabiliLies versus financial
insLiLuLions Lhere should qenerally
be alied an ASF facLor of 0%
when calculaLinq Lhe available sLable
fundinq. !hese are noL recoqnized as
sLable sources of fundinq. A ossible
exceLion Lo Lhis LreaLnenL is for
sLable deosiLs fron cooeraLive
banks LhaL are required by law Lo be
laced aL Lhe cenLral orqanizaLion
and are leqally consLrained wiLhin
Lhe cooeraLive bank neLwork as
"nininun deosiL requirenenLs."
!hese deosiLs shall be assiqned an
ASF facLor of 76% or 60% deendinq
on wheLher Lhe deosiLor is a reLail
or SME clienL or a non-financial
cororaLe clienL.
6.4 lnsLiLuLional neLworks

Enhanced qovernance
and sancLions
4
47
48
Anonq oLher deficiencies, Lhe
recenL financial crisis denonsLraLed
shorLconinqs in cororaLe qovernance
arranqenenLs in Lhe financial services
indusLry, conLribuLinq Lo excessive
risk-Lakinq. Accordinq Lo Lhe 8asel
ConniLLee on 8ankinq Suervision
and Lhe Eb Connission in nany
cases risk oversiqhL by boards was
inadequaLe, ofLen due Lo insufficienL
Line conniLnenL, inadequaLe
Lechnical knowledqe or insufficienL
diversiLy in board conosiLion. 8oards
were ofLen noL sufficienLly involved
in Lhe overall risk sLraLeqy or did
noL send sufficienL Line discussinq
risk issues, as risk nanaqenenL was
considered a low rioriLy conared
Lo oLher concerns. ln addiLion, Lhe
risk nanaqenenL funcLion has noL
been qiven aroriaLe weiqhL in Lhe
decision-nakinq rocess.
41

WiLh Lhe roosed 0irecLive,
42
Lhe
non-bindinq naLure of nosL of Lhe
cororaLe qovernance rinciles which
conLribuLed Lo Lhe lack of conliance
wiLh Lhese rinciles should be
Lransforned inLo bindinq requlaLions.
!his should hel avoid excessive risk
Lakinq. !he sLrenqLheninq of Lhe
cororaLe qovernance franework
requires:
lncreasinq Lhe effecLiveness of risk
oversiqhL by boards;
lnrovinq Lhe sLaLus of Lhe risk
nanaqenenL funcLion; and
Ensurinq effecLive noniLorinq by
suervisors of risk qovernance.
!he Lable on aqe 40 rovides a
sunnarized overview of Lhe oLions
on cororaLe qovernance.
WiLh Lhe roosed 0irecLive, Lhe
diverqenL and noL-always-aroriaLe
naLional sancLioninq reqines for
key violaLions of Lhe CP0 would
be harnonized. AL Lhis oinL, in
sone Menber SLaLes Lhe levels of
adninisLraLive ecuniary sancLions are
Loo low and Lhus are an insufficienL
deLerrenL, or Lhe acLual alicaLion of
sancLions differs in Menber SLaLes.
48

WiLh Lhe new rules, effecLive,
roorLionaLe and deLerrenL sancLions
would be inosed Lo ensure
conliance wiLh Lhe CP0 rules. For
Lhe Euroean Connission, Lhe nosL
aroriaLe oLions Lo achieve LhaL
ob|ecLive would be a conbinaLion of
Lhe followinq:
Mininun connon rules on Lhe Lye
of adninisLraLive sancLions available
Lo coneLenL auLhoriLies;
Mininun connon rules on
naxinun level of ecuniary
adninisLraLive sancLions;
LisL of key facLors Lo be Laken
inLo accounL when deLernininq Lhe
adninisLraLive sancLions;
0bliqaLion Lo rovide for Lhe
alicaLion of adninisLraLive sancLions
Lo boLh individuals and crediL
insLiLuLions;
PublicaLion of sancLions as a
qeneral rule.
.1 Enhanced
qovernance
.2 SancLions
40
5A<%1/& 0"A& 71AA"0A&20 1; ,1+%6
A&A,&%'
Pequire crediL insLiLuLions Lo disclose Lhe nunber of nandaLes of board nenbers
Pequire board nenbers Lo send sufficienL Line exercizinq Lheir duLies
LiniL Lhe naxinun nunber of nandaLes a board nenber nay hold aL Lhe sane
Line
5A<%1/& &O<&%0"'& 1; ,1+%6 A&A,&%' Pequire disclosure of Lhe recruiLnenL olicy and Lhe acLual exerLise and skills of
board nenbers
Secify skills and exerLise LhaL board nenbers nusL ossess individually and
collecLively
Pequire LhaL board nenbers receive aroriaLe inducLion and conLinuous
Lraininq
MandaLory noninaLion conniLLee
@1$20&%,+-+27& A+2+#&A&20
61A"2+27&
ProhibiL cunulaLinq nandaLes of chairnan and chief execuLive officer in Lhe
sane crediL insLiLuLion
5A<%1/& 6"/&%'"0H "2 ,1+%6'g
71A<1'"0"12
Pequire disclosure of inLernal olicy on diversiLy
8enchnarkinq differenL racLices aL naLional and Euroean level
Pequire diversiLy as one of Lhe criLeria of boards' conosiLion
Pequire crediL insLiLuLions Lo esLablish a diversiLy olicy
5A<%1/& 1?2&%'L"< ,H ,1+%6' 1; %"'I
'0%+0&#H
Pequire a declaraLion on Lhe adequacy of risk nanaqenenL sysLens
Pequire a risk sLaLenenL sLaLinq crediL insLiLuLion's aroach Lo risk
5A<%1/& <%"1%"0H #"/&2 ,H ,1+%6' 01
%"'I "''$&'
Pequire disclosure of olicy and racLice wiLh reqard Lo discussion and analysis
of risk issues durinq board neeLinqs
Pequire LhaL boards devoLe sufficienL Line Lo risk issues
MandaLory risk conniLLee aL board level
5A<%1/& 0L& "2;1%A+0"12 ;-1? 01
,1+%6' 12 %"'I
Pequire disclosure of olicy and racLice wiLh reqard Lo Lhe infornaLion flow on
risk Lo Lhe board
Pequire boards Lo deLernine Lhe conLenL, fornaL and frequency of risk
infornaLion iL should receive
Pequire LhaL Lhe risk nanaqenenL funcLion reorL direcLly Lo Lhe board
5A<%1/& 0L& '0+26"2# +26 0L&
+$0L1%"0H 1; 0L& %"'I A+2+#&A&20
;$270"12
Pequire disclosure of Lhe sLandinq and auLhoriLy of risk nanaqenenL funcLion
Pequire an indeendenL risk nanaqenenL funcLion
Pequire an indeendenL chief risk officer
Pequire LhaL chief risk officer have aroriaLe sLaLus and auLhoriLy
Pequire LhaL renoval of Lhe chief risk officer is sub|ecL Lo rior aroval by
Lhe board
K2'$%& &;;"7"&20 A12"01%"2# 1; %"'I
#1/&%2+27& ,H '$<&%/"'1%'
Pequire LhaL cororaLe qovernance is arL of suervisory review
Pequire LhaL Lhe suiLabiliLy of board nenbers is sub|ecL Lo secific suervisory
review
Pequire suervisors Lo review aqendas and suorLinq docunenLs for neeLinqs of
Lhe board
*+,-& 8Y U<0"12' 12 71%<1%+0& #1/&%2+27&
Source: ExecuLive Sunnary of Lhe lnacL AssessnenL. Acconanyinq Lhe docunenL 0irecLive of Lhe Euroean ParlianenL
and Lhe Council (July 2011}, Euroean Connission.
7
0Lher Loics
60
61
62
!he LreaLnenL of sysLenically
inorLanL financial insLiLuLions (SlFls}
- sysLenically inorLanL banks (Sl8s}
are a arL of Lhen - is currenLly under
discussion aL Lhe Financial SLabiliLy
8oard (FS8} and Lhe 8asel ConniLLee
on 8ankinq Suervision (8C8S}. !he
ob|ecLive is Lo reduce Lhe robabiliLy
of failure of 6-Sl8s
44
by increasinq
Lheir qoinq-concern loss absorbency
and reducinq Lhe exLenL or inacL of
failure of 6-Sl8s, by inrovinq qlobal
recovery and resoluLion franeworks.
ln July 2011 a consulLaLion aer
was ublished by Lhe 8C8S dealinq
wiLh Lhe assessnenL neLhodoloqy
and addiLional loss absorbency
requirenenLs for such insLiLuLions.
46

For assessinq which banks should be
considered as 6-Sl8, an indicaLor-
based neasurenenL aroach
is roosed where Lhe "selecLed
indicaLors are chosen Lo reflecL
Lhe differenL asecLs of whaL
qeneraLes neqaLive exLernaliLies
and nakes a bank criLical for Lhe
sLabiliLy of Lhe financial sysLen."
4

!he indicaLors reflecL Lhe size, Lhe
inLerconnecLedness, lack of readily
available subsLiLuLes for Lhe service
rovided, qlobal (cross |urisdicLional}
acLiviLy and Lhe conlexiLy of banks
and should be assiqned wiLh an
equal weiqhL of 20% (see Aendix}.
!he assessnenL is conducLed wiLh
consolidaLed qrou daLa.
47

!he indicaLor-based neasurenenL
aroach can be suorLed by
suervisory |udqnenL based on cerLain
rinciles. !he 8C8S also idenLified
several ancillary indicaLors which can
suorL Lhe suervisory |udqnenL
(see Aendix}.
!he 8C8S is of Lhe view LhaL Lhe
naqniLude of Lhe discussed addiLional
loss absorbency deends on Lhe
assessnenL and Lhe buckeL where iL
resides. A caiLal surcharqe beLween
1% and 2.6% - Lo be neL wiLh CE!1
caiLal - is currenLly roosed and iL
should be inlenenLed Lhrouqh an
exLension of Lhe caiLal conservaLion
buffer. lL should be hased in alonq
wiLh Lhe caiLal conservaLion and
counLercyclical buffer, i.e., beLween
201 and year-end 2018, beconinq
fully effecLive on January 1, 2010.
7.1 SysLenically lnorLanL Financial
lnsLiLuLions
68
A furLher ob|ecLive of Lhe roosed
0irecLive is Lo reduce Lhe overreliance
of insLiLuLions and invesLors on
exLernal crediL raLinqs, i.e., on raLinqs
issued by crediL raLinq aqencies. !his
qoal can be reached by:
a} Pequirinq LhaL all banks' invesLnenL
decisions are based noL only on
exLernal raLinqs buL also on Lheir own
inLernal crediL oinion; and
b} !haL banks wiLh a naLerial nunber
of exosures in a qiven orLfolio
develo inLernal raLinqs for LhaL
orLfolio insLead of relyinq on exLernal
raLinqs for Lhe calculaLion of Lheir
caiLal requirenenLs.
48
8asel ll allows a referenLial risk-
weiqhL for SMEs conared Lo oLher
cororaLes. !his beneficial LreaLnenL
will conLinue under 8asel lll.
A nore referenLial LreaLnenL,
i.e., lower risk-weiqhLs for snall
and nediun-sized enLiLies (SMEs}
conared Lo Lhe currenL sLaLus as
suqqesLed fron differenL counLries
wiLh a SME-based econony, would
require a revision Lo Lhe inLernaLional
8asel franework. Accordinq Lo Lhe
roosed Eb PequlaLion, E8A should
analyze and reorL by SeLenber 2012
on Lhe currenL risk-weiqhLs, Lakinq inLo
consideraLion a scenario for a ossible
reducLion by one-Lhird conared Lo
Lhe currenL siLuaLion.
40

WiLh 8asel ll a liniL was inLroduced
requirinq LhaL insLiLuLions have caiLal
no lower Lhan 80% of Lhe caiLal
LhaL would have been required under
8asel l. !his liniL exired aL Lhe end of
2000 buL was reinsLaLed unLil Lhe end
of 2011 by Lhe 0irecLive 2010j7jEC
(CP0 lll}. !he roosed Eb PequlaLion
concerninq 8asel lll reinsLaLes iL unLil
2016.
60

7.2
0verreliance
on exLernal
raLinqs
7.8 Snall
and Mediun-
Sized EnLiLy
7.4 8asel l
liniL
8
Conclusion
64
66
ln resonse Lo Lhe serious naLure of Lhe recenL financial
crisis, several neasures aL Lhe nicro and nacro level
are beinq considered Lo increase Lhe sLabiliLy of Lhe
financial narkeLs. 0ne na|or focus is sLrenqLheninq
qlobal caiLal and liquidiLy rules Lhrouqh 8asel lll. ln
0ecenber 2010, Lhe 8C8S ublished Lhe corresondinq
8asel lll docunenLs (a revised version of Lhe caiLal
franework was ublished in June 2011}.
ln Lhe Eb, 8asel lll will be inlenenLed
nainly Lhrouqh a PequlaLion, i.e.,
Lhe rules are direcLly alicable aL
Lhe naLional level. !he Euroean
Connission ublished Lhe
roosed PequlaLion as well as Lhe
sulenenLary 0irecLive in July 2011.
!hese leqal insLrunenLs are now
beinq discussed wiLhin Lhe Euroean
ParlianenL and Council. !he new rules
would aly as of January 1, 2018,
wiLh varyinq LransiLion eriods.
Key asecLs of 8asel lll are: a sLricLer
definiLion of caiLal Lo increase Lhe
qualiLy, consisLency and Lransarency
of Lhe caiLal base; inLroducLion of
caiLal buffers; increased caiLal
requirenenLs for CCP; inLroducLion
of a leveraqe raLio Lo sulenenL
Lhe risk-based franework of 8asel ll;
and a new qlobal liquidiLy sLandard
inLroducinq Lwo new raLios which
banks need Lo fulfill (LCP and
hSFP}. Also included are increased
requirenenLs for sysLenically
inorLanL financial insLiLuLions and
sLrenqLheninq cororaLe qovernance.
Even Lhouqh sone of Lhe requirenenLs
are sLill under discussion and need Lo
be secified (e.q., Lhe concreLe ASF-
and PSF-facLors wiLhin Lhe hSFP} and
oLhers niqhL be recalibraLed based
on Lhe quanLiLaLive inacL analysis
(e.q., leveraqe raLio}, banks aL Lhis
Line clearly nusL deal wiLh wide-
ranqinq requlaLory chanqes LhaL will
inacL Lheir business nodels and
fundinq sLraLeqies as well as caiLal
and liquidiLy cosLs. AL Lhe sane Line,
ressure conLinues Lo nounL fron a
narkeL execLinq banks Lo fulfill or
even exceed Lhe new requirenenLs
before Lhe requlaLory deadline.
6
8iblioqrahy
67
8asel lll and lLs Consequences.
ConfronLinq a hew PequlaLory
EnvironnenL; (2011}, AccenLure
found aL hLL:jjwww.accenLure.
conjSiLeCollecLion0ocunenLsj
P0FjAccenLure_8asel_lll_and_iLs_
Consequences.df
Princiles for Sound LiquidiLy Pisk
ManaqenenL and Suervision
(SeLenber 2008}, 8asel ConniLLee
on 8ankinq Suervision (hereafLer
8C8S} of Lhe 8ank for lnLernaLional
SeLLlenenLs (hereafLer '8lS'} found aL
hLL:jjwww.bis.orqjubljbcbs144.df
8asel lll: A qlobal requlaLory
franework for nore resilienL banks
and bankinq sysLens (0ecenber 2010;
rev. June 2011}, 8C8S found aL hLL:jj
www.bis.orqjubljbcbs180.df
8asel lnLernaLional franework for
liquidiLy risk neasurenenL, sLandards
and noniLorinq. (0ecenber 2010},
8C8S found aL hLL:jjwww.bis.orqj
ubljbcbs188.df
6lobal sysLenically inorLanL banks:
AssessnenL neLhodoloqy and Lhe
addiLional loss absorbency requirenenL
(July 2011}, 8C8S, ConsulLaLive
0ocunenL found aL hLL:jjwww.bis.
orqjubljbcbs201.df
8asel lll - LeiLfaden zu den neuen
EiqenkaiLal- und LiquidiLLsreqeln fr
8anken (2011}, 0euLsche 8undesbank;
hLL:jjwww.bundesbank.dejdownloadj
bankenaufsichLjdfjbasel8_leiLfaden.
df
hew roosals on caiLal requirenenLs
(July 2010}, Euroean Connission
found aL hLL:jjec.euroa.eujinLernal_
narkeLjbankjreqcaiLaljindex_en.hLn
0irecLive 2010j7jEb of Lhe Euroean
ParlianenL and of Lhe Council of
hovenber 24, 2010 anendinq
0irecLives 200j48jEC and 200j40j
EC as reqards caiLal requirenenLs
for Lhe Lradinq book and for re-
securiLisaLions, and Lhe suervisory
review of renuneraLion olicies
(hovenber 2010}, Euroean ParlianenL
and Council, found aL hLL:jjeur-lex.
euroa.eujLexbriServjLexbriServ.dour
i=0J:L:2010:820:0008:0086:Eh:P0F
0irecLive 2010j7jEb of Lhe Euroean
ParlianenL and of Lhe Council of
SeLenber 1, 2000 anendinq
0irecLives 200j48jEC, 200j40j
EC and 2007j4jEC as reqards banks
affiliaLed Lo cenLral insLiLuLions,
cerLain own funds iLens, larqe
exosures, suervisory arranqenenLs,
and crisis nanaqenenL (SeLenber
2000}, Euroean ParlianenL and
Council found aL hLL:jjeur-lex.euroa.
eujLexbriServjLexbriServ.douri=0J:L:
2000:802:0007:0110:Eh:P0F
Aendix
8asel lll Sunnary !able
*+,-& JY X+'&- 555 T$AA+%H *+,-&
8asel ConniLLee on 8ankinq Suervision reforns - 8asel lll
SLrenqLhens nicro-rudenLial requlaLion and suervision, and adds a nacro-rudenLial overlay LhaL includes caiLal buffers.
!"#$%"& ()"*+,-). /$01$2$%3
4$&&") 5
CaiLal ConLaininq leveraqe Pisk coveraqe Pisk nanaqenenL
and suervision
MarkeL
disciline
6lobal liquidiLy sLandard and
suervisory noniLorinq
4$&&") 6 4$&&") 7
8&& 9":.;
<=(=;
0ualiLy and level of caiLal
6reaLer focus on connon equiLy. !he
nininun will be raised Lo 4.6% of
risk-weiqhLed asseLs, afLer deducLions.
CaiLal conservaLion buffer
Conrisinq connon equiLy of 2.6% of
risk-weiqhLed asseLs, brinqinq Lhe LoLal
connon equiLy sLandard Lo 7%. ConsLrainL
on a bank's discreLionary disLribuLions will
be inosed when banks fall inLo Lhe buffer
ranqe.
CounLercyclical buffer
lnosed wiLhin a ranqe of 0-2.6% conris-
inq connon equiLy, when auLhoriLies |udqe
crediL qrowLh is resulLinq in an unacceL-
able build u of sysLenaLic risk.
SecuriLisaLions
SLrenqLhens Lhe caiLal LreaLnenL for
cerLain conlex securiLisaLions. Pequires
banks Lo conducL nore riqorous crediL
analyses of exLernally raLed securiLisaLion
exosures.
!radinq book
SiqnificanLly hiqher caiLal for Lradinq and
derivaLives acLiviLies, as well as conlex
securiLisaLions held in Lhe Lradinq book.
lnLroducLion of a sLressed value-aL-risk
franework Lo hel niLiqaLe rocyclicaliLy.
CounLerarLy crediL risk
SubsLanLial sLrenqLheninq of Lhe counLer-
arLy crediL risk franework. lncludes: nore
sLrinqenL requirenenLs for neasurinq
exosure; caiLal incenLives for banks Lo
use cenLral counLerarLies for derivaLives;
and hiqher caiLal for inLer-financial secLor
exosures.
Leveraqe raLio
A non-risk-based leveraqe raLio LhaL
includes off-balance sheeL exosures
will serve as a backsLo Lo Lhe
risk-based caiLal requirenenL. Also
hels conLain sysLen wide build u of
leveraqe.
SulenenLal Pillar 2 requirenenLs.
Address firn-wide qovernance and risk
nanaqenenL; caLurinq Lhe risk of
off-balance sheeL exosures and
securiLisaLion acLiviLies; nanaqinq risk
concenLraLions; rovidinq incenLives for
banks Lo beLLer nanaqe risk and reLurns
over Lhe lonq Lern; sound conensaLion
racLices; valuaLion racLices; sLress
LesLinq; accounLinq sLandards for
financial insLrunenLs; cororaLe
qovernance; and suervisory colleqes.
Pevised Pillar 8 disclosures requirenenLs
!he requirenenLs inLroduced relaLe Lo
securiLisaLion exosures and sonsorshi
of off-balance sheeL vehicles. Enhanced
disclosures on Lhe deLail of Lhe
cononenLs of requlaLory caiLal and
Lheir reconciliaLion Lo Lhe reorLed
accounLs will be required, includinq a
conrehensive exlanaLion of how a
bank calculaLes iLs requlaLory caiLal
raLios.
LiquidiLy coveraqe raLio
!he liquidiLy coveraqe raLio (LCP} will
require banks Lo have sufficienL hiqh-
qualiLy liquid asseLs Lo wiLhsLand a
80-day sLressed fundinq scenario LhaL is
secified by suervisors.
heL sLable fundinq raLio
!he neL sLable fundinq raLio (hSFP} is a
lonqer-Lern sLrucLural raLio desiqned Lo
address liquidiLy nisnaLches. lL covers Lhe
enLire balance sheeL and rovides
incenLives for banks Lo use sLable sources
of fundinq.
Princiles for Sound LiquidiLy Pisk
ManaqenenL and Suervision
!he ConniLLee's 2008 quidance enLiLled
Princiles for Sound LiquidiLy Pisk
ManaqenenL and Suervision Lakes
accounL of lessons learned durinq Lhe
crisis and is based on a fundanenLal
review of sound racLices for nanaqinq
liquidiLy risk in bankinq orqanisaLions.
Suervisory noniLorinq
!he liquidiLy franework includes a
connon seL of noniLorinq neLrics Lo
assisL suervisors in idenLifyinq and
analysinq liquidiLy risk Lrends aL boLh Lhe
bank and sysLen-wide level.
ln addiLion Lo neeLinq Lhe 8asel lll requirenenLs, qlobal sysLenically inorLanL financial insLiLuLions (SlFls} nusL have hiqher loss absorbency
caaciLy Lo reflecL Lhe qreaLer risks LhaL Lhey ose Lo Lhe financial sysLen. !he ConniLLee has develoed a neLhodoloqy LhaL includes boLh
quanLiLaLive indicaLors and qualiLaLive elenenLs Lo idenLify qlobal SlFls. !he addiLional loss absorbency requirenenLs are Lo be neL wiLh a
roqressive Connon EquiLy !ier 1 (CE!1} caiLal requirenenL ranqinq fron 1% Lo 2.6%, deendinq on a bank's sysLenic inorLance. A
consulLaLive docunenL was subniLLed Lo Lhe Financial SLabiliLy 8oard, which is coordinaLinq Lhe overall seL of neasures Lo reduce Lhe noral
hazard osed by qlobal SlFls.
Source: 8C8S (2011}: hLL:jjwww.bis.orqjbcbsjbasel8jb8sunnaryLable.df
68
8asel ConniLLee on 8ankinq Suervision reforns - 8asel lll
SLrenqLhens nicro-rudenLial requlaLion and suervision, and adds a nacro-rudenLial overlay LhaL includes caiLal buffers.
!"#$%"& ()"*+,-). /$01$2$%3
4$&&") 5
CaiLal ConLaininq leveraqe Pisk coveraqe Pisk nanaqenenL
and suervision
MarkeL
disciline
6lobal liquidiLy sLandard and
suervisory noniLorinq
4$&&") 6 4$&&") 7
8&& 9":.;
<=(=;
0ualiLy and level of caiLal
6reaLer focus on connon equiLy. !he
nininun will be raised Lo 4.6% of
risk-weiqhLed asseLs, afLer deducLions.
CaiLal conservaLion buffer
Conrisinq connon equiLy of 2.6% of
risk-weiqhLed asseLs, brinqinq Lhe LoLal
connon equiLy sLandard Lo 7%. ConsLrainL
on a bank's discreLionary disLribuLions will
be inosed when banks fall inLo Lhe buffer
ranqe.
CounLercyclical buffer
lnosed wiLhin a ranqe of 0-2.6% conris-
inq connon equiLy, when auLhoriLies |udqe
crediL qrowLh is resulLinq in an unacceL-
able build u of sysLenaLic risk.
SecuriLisaLions
SLrenqLhens Lhe caiLal LreaLnenL for
cerLain conlex securiLisaLions. Pequires
banks Lo conducL nore riqorous crediL
analyses of exLernally raLed securiLisaLion
exosures.
!radinq book
SiqnificanLly hiqher caiLal for Lradinq and
derivaLives acLiviLies, as well as conlex
securiLisaLions held in Lhe Lradinq book.
lnLroducLion of a sLressed value-aL-risk
franework Lo hel niLiqaLe rocyclicaliLy.
CounLerarLy crediL risk
SubsLanLial sLrenqLheninq of Lhe counLer-
arLy crediL risk franework. lncludes: nore
sLrinqenL requirenenLs for neasurinq
exosure; caiLal incenLives for banks Lo
use cenLral counLerarLies for derivaLives;
and hiqher caiLal for inLer-financial secLor
exosures.
Leveraqe raLio
A non-risk-based leveraqe raLio LhaL
includes off-balance sheeL exosures
will serve as a backsLo Lo Lhe
risk-based caiLal requirenenL. Also
hels conLain sysLen wide build u of
leveraqe.
SulenenLal Pillar 2 requirenenLs.
Address firn-wide qovernance and risk
nanaqenenL; caLurinq Lhe risk of
off-balance sheeL exosures and
securiLisaLion acLiviLies; nanaqinq risk
concenLraLions; rovidinq incenLives for
banks Lo beLLer nanaqe risk and reLurns
over Lhe lonq Lern; sound conensaLion
racLices; valuaLion racLices; sLress
LesLinq; accounLinq sLandards for
financial insLrunenLs; cororaLe
qovernance; and suervisory colleqes.
Pevised Pillar 8 disclosures requirenenLs
!he requirenenLs inLroduced relaLe Lo
securiLisaLion exosures and sonsorshi
of off-balance sheeL vehicles. Enhanced
disclosures on Lhe deLail of Lhe
cononenLs of requlaLory caiLal and
Lheir reconciliaLion Lo Lhe reorLed
accounLs will be required, includinq a
conrehensive exlanaLion of how a
bank calculaLes iLs requlaLory caiLal
raLios.
LiquidiLy coveraqe raLio
!he liquidiLy coveraqe raLio (LCP} will
require banks Lo have sufficienL hiqh-
qualiLy liquid asseLs Lo wiLhsLand a
80-day sLressed fundinq scenario LhaL is
secified by suervisors.
heL sLable fundinq raLio
!he neL sLable fundinq raLio (hSFP} is a
lonqer-Lern sLrucLural raLio desiqned Lo
address liquidiLy nisnaLches. lL covers Lhe
enLire balance sheeL and rovides
incenLives for banks Lo use sLable sources
of fundinq.
Princiles for Sound LiquidiLy Pisk
ManaqenenL and Suervision
!he ConniLLee's 2008 quidance enLiLled
Princiles for Sound LiquidiLy Pisk
ManaqenenL and Suervision Lakes
accounL of lessons learned durinq Lhe
crisis and is based on a fundanenLal
review of sound racLices for nanaqinq
liquidiLy risk in bankinq orqanisaLions.
Suervisory noniLorinq
!he liquidiLy franework includes a
connon seL of noniLorinq neLrics Lo
assisL suervisors in idenLifyinq and
analysinq liquidiLy risk Lrends aL boLh Lhe
bank and sysLen-wide level.
ln addiLion Lo neeLinq Lhe 8asel lll requirenenLs, qlobal sysLenically inorLanL financial insLiLuLions (SlFls} nusL have hiqher loss absorbency
caaciLy Lo reflecL Lhe qreaLer risks LhaL Lhey ose Lo Lhe financial sysLen. !he ConniLLee has develoed a neLhodoloqy LhaL includes boLh
quanLiLaLive indicaLors and qualiLaLive elenenLs Lo idenLify qlobal SlFls. !he addiLional loss absorbency requirenenLs are Lo be neL wiLh a
roqressive Connon EquiLy !ier 1 (CE!1} caiLal requirenenL ranqinq fron 1% Lo 2.6%, deendinq on a bank's sysLenic inorLance. A
consulLaLive docunenL was subniLLed Lo Lhe Financial SLabiliLy 8oard, which is coordinaLinq Lhe overall seL of neasures Lo reduce Lhe noral
hazard osed by qlobal SlFls.
60
!"#$%& 4DY .^@Y N"'IVQ&"#L0' ;1% -+%#& ;"2+27"+- "2'0"0$0"12' _ X+'&- 55 /'= X+'&- 555
*+,-& BY .^@Y N"'IVQ&"#L0' ;1% -+%#& ;"2+27"+- "2'0"0$0"12' _ X+'&- 55 /'= X+'&- 555
.''&0 ^+-$& @1%%&-+0"12Y N"'IVQ&"#L0 ;1% -+%#& ;"2+27"+-
"2'0"0$0"12' X+'&- 55 /'= X+'&- 555
Source: AccenLure
Source: AccenLure
!"#$
!%#$
!&#$
'()*+ ---
'()*+ --
!.#$
!##$
"#$
%#$
&#$
.#$
#$
!"#$%&'"()*
#/#0$
#/!$
#/.$
#/0$
#/&$
#/1$
#/%$
#/2$
#/"$
#/3$
!$
!/!$
!/.$
!/0$
!/&$
!/1$
!/%$
!/2$
!/"$
!/3$
.$
./!$
./.$
./0$
./&$
./1$
P0 PW 8asel ll PW 8asel lll lncrease PW
0.08% 16.81% 20.84% 8.00%
0.10% 81.48% 42.47% 86.12%
0.20% 4.68% 2.22% 88.74%
0.80% 67.4% 7.44% 82.0%
0.40% .48% 87.62% 81.4%
0.60% 78.70% 0.62% 80.81%
0.0% 70.08% 104.08% 80.07%
0.70% 86.88% 110.48% 20.41%
0.80% 00.01% 116.04% 28.81%
0.00% 04.16% 120.77% 28.27%
1.00% 07.8% 126.08% 27.77%
1.10% 101.10% 128.82% 27.80%
1.20% 104.28% 182.24% 2.88%
1.80% 107.00% 186.84% 2.48%
1.40% 100.6% 188.1% 2.10%
1.60% 111.08% 140.7% 26.7%
1.0% 114.14% 148.1% 26.48%
1.70% 11.20% 146.80% 26.12%
1.80% 118.16% 147.40% 24.88%
1.00% 110.00% 140.4% 24.66%
2.00% 121.76% 161.82% 24.20%
2.10% 128.42% 168.00% 24.04%
2.20% 126.02% 164.78% 28.81%
2.80% 12.6% 16.40% 28.68%
2.40% 128.06% 167.07% 28.87%
2.60% 120.48% 160.48% 28.1%
0
*+,-& CY 526"7+01%V,+'&6 A&+'$%&A&20 +<<%1+7L SVT5XT
*+,-& 4FY .27"--+%H "26"7+01%' ;1% +''&''A&20 SVT5XT
526"7+01%V,+'&6 A&+'$%&A&20 +<<%1+7L SVT5XT
Source: 6lobal sysLenically inorLanL banks: AssessnenL neLhodoloqy and Lhe addiLional loss absorbency requirenenL (July 2011}, 8C8S, ConsulLaLive 0ocunenL
Source: 6lobal sysLenically inorLanL banks: AssessnenL neLhodoloqy and Lhe addiLional loss absorbency requirenenL (July 2011}, 8C8S, ConsulLaLive 0ocunenL.
1
526"7+01%V,+'&6 G&+'$%&A&20 .<<%1+7L
@+0&#1%H [+26 ?&"#L0"2#\ 526"/"6$+- 526"7+01% 526"7+01% Q&"#L0"2#
Cross-|urisdicLional acLiviLy (20%} Cross-|urisdicLional clains
Cross-|urisdicLional liabiliLies
10%
10%
Size (20%} !oLal exosures as defined for use in Lhe 8asel lll leveraqe
raLio
20%
lnLerconnecLedness (20%} lnLra-financial sysLen asseLs
lnLra-financial sysLen liabiliLies
Wholesale fundinq raLio
.7%
.7%
.7%
SubsLiLuLabiliLy (20%} AsseLs under cusLody
PaynenLs cleared and seLLled Lhrouqh aynenL sysLens
values of underwriLLen LransacLions in debL and equiLy
narkeLs
.7%
.7%
.7%
ConlexiLy (20%} 0!C derivaLives noLional value
Level 8 asseLs
!radinq book value and available for sale value
.7%
.7%
.7%
R"'0 1; T0+26+%6"W&6 .27"--+%H 526"7+01%'
@+0&#1%H 526"/"6$+- 526"7+01%
Cross-|urisdicLional acLiviLy (20%} hon-donesLic revenue as a roorLion of LoLal revenue
Cross-|urisdicLional clains and liabiliLies as a roorLion of LoLal asseLs and
liabiliLies
Size 6ross or neL revenue
EquiLy narkeL caiLalizaLion
SubsLiLuLabiliLy 0eqree of narkeL arLiciaLion:
1. 6ross nark-Lo-narkeL value of reo, reverse reo and securiLies lendinq
LransacLions
2. 6ross nark-Lo-narkeL 0!C derivaLives LransacLions
ConlexiLy hunber of |urisdicLions
FooLnoLes
2
1. 8asel lll: A qlobal requlaLory franework
for nore resilienL banks and bankinq
sysLens (0ecenber 2010; rev. June 2011},
8asel ConniLLee on 8ankinq Suervision
(hereafLer "8C8S"} of Lhe 8ank for
lnLernaLional SeLLlenenLs (hereafLer
"8lS"} found aL hLL:jjwww.bis.orqjbcbsj
basel8jconilaLion.hLn and lnLernaLional
franework for liquidiLy risk neasurenenL,
sLandards and noniLorinq (0ecenber
2010}, 8C8S. !he aendix of Lhis
handbook conLains a 8asel lll sunnary
Lable fron 8C8S.
2. Euroean CaiLal PequirenenLs
0irecLive lll (2010j7jEb}.
8. Princiles for Sound LiquidiLy Pisk
ManaqenenL and Suervision (June 2008},
8C8S.
4. Euroean CaiLal PequirenenLs
0irecLive lll (2000j111jEC}.
6. For 8asel lll inlenenLaLion challenqes
see: 8asel lll and lLs Consequences.
ConfronLinq a hew PequlaLory
EnvironnenL (2011}, AccenLure
found aL hLL:jjwww.accenLure.conj
SiLeCollecLion0ocunenLsjP0FjAccenLure_
8asel_lll_and_iLs_Consequences.df.
. hew roosals on caiLal requirenenLs
(July 2011}, Euroean Connission found aL
hLL:jjec.euroa.eujinLernal_narkeLjbankj
reqcaiLaljindex_en.hLn.
7. hew roosals on caiLal requirenenLs
(July 2011}, Euroean Connission found aL
hLL:jjec.euroa.eujinLernal_narkeLjbankj
reqcaiLaljindex_en.hLn.
8. Euroean Connission (2011}: CP0 lv -
FrequenLly Asked 0uesLions, . 16 (hLL:jj
euroa.eujraidjressPeleasesAcLion.dore
ference=MEM0j11j627&fornaL=R!ML&aq
ed=0&lanquaqe=Eh&quiLanquaqe=en}.
0. For Lhe followinq descriLions see hew
roosals on caiLal requirenenLs (July
2011}, Euroean Connission found aL
;hLL:jjec.euroa.eujinLernal_narkeLjbankj
reqcaiLaljindex_en.hLn
10. ArLicle 2 of Lhe roosed Eb
PequlaLion [Proosal for a PequlaLion
of Lhe Euroean ParlianenL and of Lhe
Council on rudenLial requirenenLs for
crediL insLiLuLions and invesLnenL firns|
(Euroean Connission, July 2011}.
11. Euroean Connission (2011}: CP0 lv -
FrequenLly Asked 0uesLions.
12. Proosed Eb PequlaLion [Proosal for a
PequlaLion of Lhe Euroean ParlianenL and
of Lhe Council on rudenLial requirenenLs
for crediL insLiLuLions and invesLnenL
firns| (Euroean Connission, July 2011}.
18. PelevanL enLiLies accordinq Lo Lhe
Eb roosed PequlaLion are: (a} anoLher
insLiLuLion; (b} a financial insLiLuLion; (c} an
insurance underLakinq; (d} a Lhird counLry
insurance underLakinq; (e} a reinsurance
underLakinq; (f} a Lhird counLry
reinsurance underLakinq; (q} a financial
underLakinq; (h} a nixed acLiviLy insurance
holdinq conany; (i} an underLakinq
excluded fron Lhe scoe of 0irecLive. See
hew roosals on caiLal requirenenLs
(July 2011}, Euroean Connission found aL
hLL:jjec.euroa.eujinLernal_narkeLjbankj
reqcaiLaljindex_en.hLn.
14. See Euroean Connission (2011}: CP0
lv - FrequenLly Asked 0uesLions (hLL:jj
euroa.eujraidjressPeleasesAcLion.dore
ference=MEM0j11j627&fornaL=R!ML&aq
ed=0&lanquaqe=Eh&quiLanquaqe=en}.
16. ArLicle 108(7} of Lhe roosed Eb
PequlaLion [Proosal for a PequlaLion
of Lhe Euroean ParlianenL and of Lhe
Council on rudenLial requirenenLs for
crediL insLiLuLions and invesLnenL firns|
deals wiLh Lhe calculaLion of risk-weiqhLed
exosure anounLs wiLh reqard Lo
counLerarLies wiLh which Lhe insLiLuLion
has enLered inLo an insLiLuLional roLecLion
schene LhaL is a conLracLual or sLaLuLory
liabiliLy arranqenenL which roLecLs Lhose
insLiLuLions and in arLicular ensures Lheir
liquidiLy and solvency Lo avoid bankruLcy
in case iL becones necessary.
1. For Lhe followinq exlanaLions see
hew roosals on caiLal requirenenLs
(July 2011}, Euroean Connission found aL
hLL:jjec.euroa.eujinLernal_narkeLjbankj
reqcaiLaljindex_en.hLn.
17. For nore deLails abouL Lhe calculaLion
see ArLicle 181 of Lhe roosed Eb
0irecLive.
18. See also 8undesbank (May 2011}: 8asel
lll - LeiLfaden zu den neuen EiqenkaiLal-
und LiquidiLiLLsreqeln fr 8anken.
10. Euroean Connission (2011}: Proosal
for a 0irecLive of Lhe Euroean ParlianenL
and of Lhe Council on Lhe access Lo
Lhe acLiviLy of crediL insLiLuLions and
Lhe rudenLial suervision of crediL
insLiLuLions and invesLnenL firns and
anendinq 0irecLive 2002j87jEC of Lhe
Euroean ParlianenL and of Lhe Council
on Lhe sulenenLary suervision of
crediL insLiLuLions, insurance underLakinqs
and invesLnenL firns in a financial
conqloneraLe; . 12.
20. CalibraLed in increnenLs of 0.26
ercenLaqe oinLs, or nulLiles of .26.
21. !he direcLive allows also a buffer
beyond 2.6 if |usLified.
22. 8asel lll: A qlobal requlaLory
franework for nore resilienL banks and
bankinq sysLens (0ecenber 2010; rev.
June 2011}, 8C8S as well as hew roosals
on caiLal requirenenLs (July 2011},
Euroean Connission found aL hLL:jj
ec.euroa.eujinLernal_narkeLjbankj
reqcaiLaljindex_en.hLn.
28. 8asel lll: A qlobal requlaLory
franework for nore resilienL banks and
bankinq sysLens (0ecenber 2010; rev.
June 2011}, 8C8S, . 88.
24. Accordinq Lo Lhe roosed Eb
PequlaLion [Proosal for a PequlaLion
of Lhe Euroean ParlianenL and of Lhe
Council on rudenLial requirenenLs for
crediL insLiLuLions and invesLnenL firns|
unrequlaLed financial enLiLy neans any
oLher enLiLy LhaL is noL a requlaLed enLiLy
buL erforns one or nore of Lhe lisLed
acLiviLies.
26. Euroean Connission (2011}:
Proosal for a 0irecLive of Lhe Euroean
ParlianenL and of Lhe Council on Lhe
access Lo Lhe acLiviLy of crediL insLiLuLions
and Lhe rudenLial suervision of crediL
insLiLuLions and invesLnenL firns and
anendinq 0irecLive 2002j87jEC of Lhe
Euroean ParlianenL and of Lhe Council
on Lhe sulenenLary suervision of
crediL insLiLuLions, insurance underLakinqs
and invesLnenL firns in a financial
conqloneraLe; . 16.
2. For Lhe followinq descriLions see hew
roosals on caiLal requirenenLs (July
2011}, Euroean Connission found aL
hLL:jjec.euroa.eujinLernal_narkeLjbankj
reqcaiLaljindex_en.hLn.
27. 0urinq Lhe eriod fron Jan. 1, 2018
Lo 0ec. 81, 2017 coneLenL auLhoriLies
nay erniL insLiLuLions Lo calculaLe Lhe
end-of-quarLer leveraqe raLio where
Lhey consider LhaL insLiLuLions nay noL
have daLa of sufficienLly qood qualiLy
Lo calculaLe a leveraqe raLio LhaL is an
ariLhneLic nean of Lhe nonLhly leveraqe
raLios over a quarLer.
28. For exliciLly nenLioned off-balance-
sheeL iLens, Lhere are exceLions Lo Lhis
LreaLnenL.
8
20. Princiles for Sound LiquidiLy Pisk
ManaqenenL and Suervision (SeLenber
2008}, 8C8S.
80. For Lhe followinq descriLions see hew
roosals on caiLal requirenenLs (July
2011}, Euroean Connission found aL
hLL:jjec.euroa.eujinLernal_narkeLjbankj
reqcaiLaljindex_en.hLn
81. See ArLicle 7(1} of Lhe roosed
PequlaLion; for cross border insLiLuLions
also ArLicle 7(2}.
82. ArLicle 401 of Lhe roosed PequlaLion.
88. 8onds are issued by a crediL insLiLuLion
which has iLs reqisLered office in a
Menber SLaLe and is sub|ecL by law Lo
secial ublic suervision desiqned Lo
roLecL bond-holders [0irecLive 2000j6j
EC of Lhe Euroean ParlianenL and
Lhe Council, hLL:jjeur-lex.euroa.euj
LexbriServjLexbriServ.douri=0J:L:2000:8
02:0082:000:en:P0F}.
84. Accordinq Lo Lhe roosed Eb
PequlaLion [Proosal for a PequlaLion
of Lhe Euroean ParlianenL and of Lhe
Council on rudenLial requirenenLs for
crediL insLiLuLions and invesLnenL firns|
reLail deosiL neans a liabiliLy Lo a naLural
erson or Lo a snall and nediun sized
enLerrise where Lhe aqqreqaLe liabiliLy Lo
such clienLs or qrou of connecLed clienLs
is less Lhan 1 nillion EbP.
86. See ArLicle 408(2} of Lhe roosed
Eb PequlaLion [Proosal for a PequlaLion
of Lhe Euroean ParlianenL and of Lhe
Council on rudenLial requirenenLs for
crediL insLiLuLions and invesLnenL firns|.
8. ln Lhe 8asel lll docunenL fron Lhe
8asel ConniLLee on 8ankinq Suervision
"> 100%" is roosed.
87. 8asel lll: lnLernaLional franework for
liquidiLy risk neasurenenL, sLandards and
noniLorinq (0ecenber 2010}, 8C8S.
88. 8asel lll: lnLernaLional franework for
liquidiLy risk neasurenenL, sLandards and
noniLorinq (0ecenber 2010}, 8C8S.
80. MeLrics suqqesLed: a} Fundinq
liabiliLies sourced fron each siqnificanL
counLerarLyj Lhe bank's balance sheeL
LoLal; b} Fundinq liabiliLies sourced fron
each siqnificanL roducLjinsLrunenLj
Lhe bank's balance sheeL LoLal; c} LisL of
asseL and liabiliLy anounLs by siqnificanL
currency.
40. hoLe: AnounL of LoLal neL foreiqn
exchanqe cash ouLflows should be neL of
foreiqn exchanqe hedqes.
41. For Lhe followinq descriLions
see Euroean Connission (2011} -
Connission SLaff Workinq Paer:
ExecuLive Sunnary of Lhe lnacL
AssessnenL. Acconanyinq Lhe docunenL
0irecLive of Lhe Euroean ParlianenL and
Lhe Council on Lhe access Lo Lhe acLiviLy
of crediL insLiLuLions and Lhe rudenLial
suervision of crediL insLiLuLions and
invesLnenL firns and anendinq 0irecLive
2002j87jEC of Lhe Euroean ParlianenL
and of Lhe Council on Lhe sulenenLary
suervision of crediL insLiLuLions, insurance
underLakinqs and invesLnenL firns in a
financial conqloneraLe (hLL:jjec.euroa.
eujinLernal_narkeLjbankjdocsjreqcaiLalj
CP04_refornjexecuLive_sunnary_lA_
direcLive_en.df}.
42. See hew roosals on caiLal
requirenenLs (July 2011}, Euroean
Connission found aL hLL:jjec.euroa.
eujinLernal_narkeLjbankjreqcaiLalj
index_en.hLn.
48. For Lhe followinq descriLions
see Euroean Connission (2011} -
Connission SLaff Workinq Paer:
ExecuLive Sunnary of Lhe lnacL
AssessnenL. Acconanyinq Lhe docunenL
0irecLive of Lhe Euroean ParlianenL and
Lhe Council on Lhe access Lo Lhe acLiviLy
of crediL insLiLuLions and Lhe rudenLial
suervision of crediL insLiLuLions and
invesLnenL firns and anendinq 0irecLive
2002j87jEC of Lhe Euroean ParlianenL
and of Lhe Council on Lhe sulenenLary
suervision of crediL insLiLuLions, insurance
underLakinqs and invesLnenL firns in a
financial conqloneraLe (hLL:jjec.euroa.
eujinLernal_narkeLjbankjdocsjreqcaiLalj
CP04_refornjexecuLive_sunnary_lA_
direcLive_en.df}.
44. 6lobal sysLenically inorLanL banks.
46. See hereLo and for Lhe followinq
descriLions 6lobal sysLenically inorLanL
banks: AssessnenL neLhodoloqy and Lhe
addiLional loss absorbency requirenenL
(July 2011}, 8C8S, ConsulLaLive 0ocunenL.
4. 6lobal sysLenically inorLanL
banks: AssessnenL neLhodoloqy and Lhe
addiLional loss absorbency requirenenL
(July 2011}, 8C8S, ConsulLaLive 0ocunenL,
. 8.
47. For nore deLails see 6lobal
sysLenically inorLanL banks: AssessnenL
neLhodoloqy and Lhe addiLional loss
absorbency requirenenL (July 2011}, 8C8S,
ConsulLaLive 0ocunenL.
48. See CP0 lv - FrequenLly Asked
0uesLions (2011}, Euroean Connission.
40. hew roosals on caiLal requirenenLs
(July 2011}, Euroean Connission found aL
hLL:jjec.euroa.eujinLernal_narkeLjbankj
reqcaiLaljindex_en.hLn.
60. See Euroean Connission (July
2011}: hew roosals on caiLal
requirenenLs;hLL:jjec.euroa.eujinLernal_
narkeLjbankjreqcaiLaljindex_en.hLn.
ACC11-2081_lcj11-400
CoyriqhL

2012 AccenLure
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Riqh Perfornance 0elivered
are Lradenarks of AccenLure.
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consulLinq, Lechnoloqy services
and ouLsourcinq conany, wiLh
aroxinaLely 28,000 eole servinq
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Conbininq unaralleled exerience,
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and exLensive research on Lhe world's
nosL successful conanies, AccenLure
collaboraLes wiLh clienLs Lo hel Lhen
becone hiqh-erfornance businesses
and qovernnenLs. !he conany
qeneraLed neL revenues of bS$26.6
billion for Lhe fiscal year ended
Auq. 81, 2011. lLs hone aqe is
www.accenLure.con.
AbouL AccenLure Pisk
ManaqenenL
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consulLinq services works wiLh clienLs
Lo creaLe and inlenenL inLeqraLed
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inrove shareholder value and
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0isclainer
!his docunenL is inLended for qeneral
infornaLional uroses only and does
noL Lake inLo accounL Lhe reader's
secific circunsLances, and nay noL
reflecL Lhe nosL currenL develonenLs.
AccenLure disclains, Lo Lhe fullesL
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G"7L+&- .$&%
Michael is execuLive rincial -
AccenLure Pisk ManaqenenL, Munich,
resonsible for 6ernan-seakinq
narkeLs. Michael has 18 years of
indusLry and consulLinq exerience
in financial services and risk
nanaqenenL across Euroe workinq
wiLh qlobal insLiLuLions Lo Lransforn
Lheir business and risk caabiliLies.
Ris exLensive exerience in risk
nanaqenenL - nainly in Lhe areas of
narkeL, crediL and oeraLional risk, risk
and requlaLory naLLers and oeraLinq
nodels hels execuLives and Lheir
nulLinaLional firns becone hiqh-
erfornance businesses.
S&1%# /12 E;1&'0-
6eorq is senior nanaqer - AccenLure
Pisk ManaqenenL. 8ased in vienna,
6eorq has 8 years of exerience in Lhe
area of risk nanaqenenL wiLh a focus
on crediL and liquidiLy risk, requlaLory
naLLers and Pisk-WeiqhLed AsseLs
oLinizaLion. WiLh his exerience as
a bankinq insecLor aL Lhe AusLrian
haLional 8ank, his raqnaLic
knowledqe fron workinq wiLh reqional
and inLernaLional financial insLiLuLions
across 6ernan-seakinq narkeLs
and his Lechnical skills erLaininq
Lo 8asel ll and 8asel lll requlaLory
requirenenLs, he quides conanies on
Lheir |ourney Lo hiqh erfornance.
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