Banking Supervision Regulation - Comment Letter - Association of German Bankers - August 25, 2011

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Consultative Document: Globally systemically important banks: Assessment methodology and the additional loss absorbency requirement
August 25, 2011

From the comment letter:

  • "It is difficult to understand how the Basel Committee comes to the conclusion that the Basel III regulations, which have not yet entered into force and on whose application no experience has yet been gathered, are insufficient to address the risks of globally systemically important banks. The argument that G-SIBs cause negative externalities ignores the fact that, besides these negative effects, positive external effects also play a role in the global financial system, which are of great benefit to the real economy."
  • " is highly important that the Gzo's demands are translated into action properly. In our view, this means initially setting low additional requirements which - if justified - can subsequently be tightened. In this way, the imminent risk of overstraining the financial sector could be avoided."
  • " is questionable whether it is actually possible for large internationally operating banks to significantly reduce their systemic importance based on the score produced by the proposed assessment methodology without fundamentally altering their business model and business structure, while at the same time avoiding any negative implications for the real economy. We believe that the measures proposed for G-SIBs by the Basel Committee hamper future economic growth by generally punishing and thus limiting any increase in size."


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