On 12 September 2010, the Group of Governors and Heads of
Supervision of the Basel Committee on Banking Supervision announced
that they had reached agreement on measures that would
fundamentally strengthen global capital standards. A key
requirement under the new rules, known as Basel III, would be that
banks would have to hold top quality capital totalling 7 per cent
of their risk bearing assets, a significant increase from 2 per
The purpose of this blog is to provide an update on the progress
of the implementation of the Basel III framework. Our teams in
banking and financial services will also be providing their insight
into the issues as they unfold.
G20 summit in Seoul - consistent implementation required
At the Seoul summit the G20 Leaders reaffirmed their commitment
to take action at both the national and international level to
raise regulatory standards and to ensure that national authorities
implement global standards in a consistent way that avoids market
fragmentation, protectionism and regulatory arbitrage. In
particular the G20 Leaders confirmed that they would fully
implement the new Basel III framework.
The European Commissioner for the Internal Market and Services,
Michel Barnier, has issued a press statement welcoming the G20
Leaders' support of the Basel III framework. However, Barnier
emphasised the need for the new framework to be consistently
implemented across the globe, stating that "The Commission
attaches the utmost importance to an international level playing
field. If these new rules are going to work properly, it is
imperative that all jurisdictions implement them at the same time,
and in a consistent manner, in the EU and beyond."
The Commission has confirmed that in March 2011 it will table
the necessary legislative proposals to transpose Basel III into EU
law. Legislation will take the form of a revision of the Capital
Requirements Directive (CRD IV).
While the use of cash settled equity swaps is an established part of the Australian securities market, their use in recent high profile takeovers in Australia has attracted much attention. In particular, this attention has focused on the use of swaps by bidders or potential bidders in target companies without disclosure.
An AFSL is required if a person carries on a financial services business in Australia, unless an exemption applies.
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