BREAKING: Biggest banks each set to be hit with $200m trading rule costs. New Basel regulations due to take effect in 2019 will create need for 2,000 staff (Blogger: Verdens største banker rammes af milliardkrav. Tidligere erhvervs- og vækstminister Troels Lund Poulsen advarede os, at yderligere reguleringskrav til de danske pengeinstitutter, ville komme (April 2016). Jeg spår, slusen er åben for selvransagelse. Et splitsekund senere, vil vi se, samtlige danske storbanker og realkreditinstutioner, grine deres røv i laser og retfærdiggøre deres øgede gebyrer og bidragssatser, ved samstemmende at råbe; 'vi advarede jer jo'.. Den magtfulde Basel-komité blandede sig direkte i den danske debat, der rejste sig som en storm, efter at Nykredit i februar 2016 fortalte om de nye tiltag, som ifølge selskabet er en direkte konsekvens af kommende kapitalkrav fra komitéen. Nu har Nykredit's magiske tricks med "kundekroner" og baggrunden for prisstigninger i den finansielle sektor, en reel årsag og reel løsning.. Nåååå.. Hvor er det synd for bankerne, tænker danske politikere, som er så glade for bankpakker. Hver gang økonomien er ved at falde fra hinanden, vedtager partier fra højre til venstre nye pakker, der skal rette op på den håbløse situation. Alle borgerne har jo reddet bankernes aktionærer uden at få noget til gengæld, det ved vi jo godt. Lad os tage fat om den syvende bankpakke, der skal redde de danske småbanker for at lukke ned, grundet de nye kapitalkrav fra komitéen. Samtidigt, tænker staten, lad os hyre World Banking Mafia #1 - Rothschild, som vores enerådende finansiel rådgiver. Borgerne ved jo ikke, at Rothschild fik størstedelen af de 100 millioner kroner, som vi som stat, betalte for rådgivning i forbindelse med Bankpakke 2 (2009), og forundersøgelsen af Dongs børsnotering, som Rothschild stod for i 2007, der kostede 70 millioner kroner..". ".. Business: Nogle af verdens største banker har udsigt til at skulle afsætte 200 mio. dollar svarende til 1,4 mia. kr., til at implementere nye regler fra Basel-komitéen, skriver Financial Times. Beløbet er markant højere end bankernes oprindelige estimater. Reglerne forventes at træde i kraft i 2019.. ")

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6 hours ago - by: Laura Noonan, Investment Banking Correspondent

Some of the world’s biggest banks are set to spend more than $200m each — much higher than their original estimate — to implement new regulations that will dramatically increase capital demands for some parts of their trading businesses.

Consultancy Oliver Wyman came up with the new cost estimates of implementing the fundamental review of the trading book rules after studying the plans of 20 European, US and Asian banks with large trading businesses.

The consultants’ latest figures of implementation costs, ranging from $100m to above $200m, are a small percentage of big banks’ total annual cost bases of about $60bn. But they dwarf the $43m to $129m estimates the consultants came up with 12 months ago. “Last year, banks were in the early stages of costing,” said Oliver Wyman’s Aude Schonbachler. “Some of them clearly misunderstood how big the effort would be.”

The fundamental review of the trading book, or FRTB, set out by the Basel Committee on Banking Supervision, overhauls the way banks treat the risk of the bonds, stocks, commodities and other assets they hold in the short term so they can facilitate clients’ trading.

Its earliest iteration would have increased capital demands for some banks by as much as 800 per cent, the Basel Committee found. Since then, the rules have been eased, but banks will still have to increase capital significantly for some activities.

The latest Oliver Wyman research highlights the significant operational costs banks will face. The consultants put the industry-wide costs of implementation at $5bn, including more than $500m that has already been spent, mainly on “impact studies and planning”. The consultancy says banks will have to add 2,000 new staff to their FRTB programmes, through a combination of hiring new staff, reassigning existing staff and using consultants.

The new rules are due to come into force globally by the end of 2019. Ms Schonbachler said banks are still working to that timeframe despite an EU directive in November that suggested a three-year phase-in period. Another factor that could delay implementation is the splintering of the regulatory policies of the American and European authorities, which recently missed a critical deadline for agreeing on how banks should treat the riskiness of their loans.

There are still some technical aspects of the FRTB to be agreed, and Ms Schonbachler said some banks were holding off on hiring staff and spending money until the rules are finalised.

“The banks are quite cost conscious and resource constrained,” she said, adding that some banks said they would prioritise investing in areas such as US stress testing, the only regulatory programme with higher costs than the FRTB.

But a wait-and-see approach could be risky. Ms Schonbachler said that IT market risk analysts are already “extremely difficult to hire” in London. Even banks that have started early might have to make their implementation plans less ambitious.

Banks will receive the best capital treatment if they use internal models to calculate their risk, but these models take a long time to design. “As they progress in the implementation it is likely that they will end up having to do some shortcuts if the timeline of end 2019 is not pushed back,” Ms Schonbachler said. Copyright The Financial Times Limited 2017. All rights reserved. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web.

Source: https://www.ft.com/content/94fdf6d0-d41b-11e6-9341-7393bb2e1b51
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