Recent developments in Brazilian financial regulation

neiNei Schilling Zelmanovitsnei, a partner at Brazilian law firm Machado Meyer, reviews the changes to financial sector regulation in Brazil since the financial crisis. He focuses on the implementation of the Basel 3 capital standards, anti-money laundering rules, and suitability requirements. The piece was published in the latest issue of Global Banking & Financial Policy Review.

Read the full article here.

Basel 3’s new market risk framework and leverage ratio requirements endorsed

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The Basel Committee’s governing body has endorsed Basel 3’s new market risk framework and leverage ratio requirements.

“Notable improvements in the new risk framework, which takes effect in 2019, include:

– A revised boundary between the banking and trading books that will reduce scope for arbitrage;

– A revised internal models approach with more coherent and comprehensive risk capture;

– An enhanced model approval process and more prudent recognition of hedging and portfolio diversification; and

– A revised standardised approach that serves as a credible fall-back and floor to the model-based approach, and facilitates more consistent and comparable reporting of market risk across banks and jurisdictions.

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The [Group of Central Bank Governors and Heads of Supervision (GHOS)] also discussed the final design and calibration of the leverage ratio. Members agreed that the leverage ratio should be based on a Tier 1 definition of capital and should comprise a minimum level of 3%, and they discussed additional requirements for global systemically important banks.”

Read the full press release here.