C. New Framework Conditions for Banks
Norges Bank. Financial Stability › Nbr. 1, May 2010
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Summary
The European Commission has proposed tighter regulation of bank capital and liquidity management. The new regulation will make banks more robust. Impact analyses conducted by banks will form a basis for the final form of the new regulation. The aim is to implement new rules in the EU and EEA by end-2012. Transitional rules will ensure a gradual adaptation. The new regulation will change the framework conditions for banks in a number of areas.
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C. New Framework Conditions for Banks
Tighter regulation of bank liquidity
The financial crisis has shown that bank liquidity management has not been robust to money and capital market failure. No quantitative requirements are currently imposed regarding how assets are financed or how easily they can be realised. The European Commission therefore proposes the implementation of minimum requirements regarding both banks' liquidity buffers and the stability of their funding.1. Minimum requirements regarding banks 'liquidity buffersThe European Commission proposes a requirement that banks should be able to survive a period of 30 days of substantial deposit withdrawals without supply of fresh fund...See the full content of this document
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