The Basel Committee on Banking Supervision recently provided a new set of proposals designed to help manage the risk that exists within lending institutions, but even with these more stringent potential regulations, market experts believe that these banks have too little capital to be considered safe.
Earlier this week, the BCBS specifically proposed a new set of guidelines that involves providing lending institutions with a uniform methodology for determining their leverage ratio. The leverage ratio was designed to help provide one more safeguard to manage the risks associated with measuring and modeling. The committee also provided a proposal on the requirements these organizations should have for disclosing this ratio.
Market experts warned that even if these proposals are adopted, many banks are still working with capital levels that are dangerously low, according to The New York Times.
"We are still looking at very low numbers from a historical perspective," Harald Benink, who works as a professor of banking and finance at Tilburg University in the Netherlands, told the media outlet. "If we really want to protect the taxpayers, we need to start looking at numbers that are more ambitious."
◦ Asset Liability Management
◦ Portfolio Risk
◦ Sensitivities & Hedging
◦ Stress Testing & Scenario Analysis