The Basel Committee on Banking Supervision released revised final standards for capital requirements for bank exposures to central counterparties (“CCPs”). Notable revisions of the framework include:
- a new approach for determining the capital requirements for bank exposures to qualifying CCPs (“QCCPs”);
- employing a standardized approach for counterparty credit risk (as opposed to the Current Exposure Method) to measure the hypothetical capital requirement of a CCP;
- an explicit cap on the capital charges applied to bank exposures to QCCPs (i.e., those charges will not exceed the charges that would be otherwise applicable if the CCP were a non-qualifying CCP);
- specification of the treatment for multilevel client structures; and
- the inclusion of text relating to frequently asked questions posed to the Basel Committee in the course of its work on the revised policy framework.
See: Final Requirements; Interim Requirements; Press Release.