GFMA has submitted a response to the Basel Committee on Banking Supervision (BCBS)’s consultative document on guidelines for counterparty credit risk (CCR) management. While we agree with many of the overarching principles set forth in the Consultation, GFMA is concerned that many of the guidelines are overly prescriptive and leave little room for a nuanced, risk-based determinations when dealing with counterparties. GFMA is concerned that the proposed guidelines would result in a framework that emphasizes risk-avoidance, rather than risk management. The ability for GFMA’s members to provide critical capital markets services depends on their ability to balance the risks and rewards of their activities. A framework that incentivizes risk avoidance would increase the cost and decrease the availability of those services to the marketplace and drive growth of the unregulated sector. GFMA provide specific recommendations that we believe would improve the risk-sensitivity and flexibility of the guidelines.
– August 28, 2024 –
