Industry concerned over costs of equity swaps under Basel III

The FT reported that GFMA and the Institute of International Finance, two industry associations, are worried about the cost of equity swaps under Basel III. According to the article:

“The Basel Committee’s NSFR aims to ensure banks hold a minimum amount of stable funding based on the characteristics of their assets. The measure, which aims to prevent funding squeezes such as the one that contributed to the downfall of the British bank Northern Rock, is expected to come into force in 2018. It comes alongside a Liquidity Coverage Ratio ensuring banks hold enough assets such as government bonds that can easily be converted into cash. Global regulators in January issued revised proposals for the NSFR, saying it was an essential component of the Basel III reforms aimed at making banks more resilient.”

The full article is available here.

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