FIA president Walt Lukken said new leverage rules will harm end-users
Six trade bodies have criticised the Basel
Committee’s revised framework for leverage ratio
calculation, arguing the controversial charge will ultimately
hurt end users.
The Global Financial Markets Association
(GFMA), the Institute of International Finance (IIF), the
International Swaps and Derivatives Association (Isda), the
Japan Financial Markets Council and the Clearing House issued a
joint response to the Basel Committee’s
consultation on Revisions to the Basel III leverage ratio
framework. Separately, the Futures Industry Association (FIA)
has also responded to the revised framework.
"Even client transactions that are
designed to reduce risk will require broker-dealers to expand
their balance sheets. Regulations should not impair
clients’ ability to conduct risk-reducing
transactions in cases where these transactions do not add risk
to banks’ balance sheets. By excluding cash and
cash equivalents from the exposure measure of the leverage
ratio, regulators could alleviate the constraints on these
important market activities, especially in distressed markets,"
Kenneth Bentsen, chief executive officer, GFMA, said in the
This article is available exclusively to subscribers
Please log in to continue reading.
Not yet a subscriber?
Click here to take a free trial.
Already have an account? |
Please fill in your details below and a customer service representative will contact you.