GFMA, the Institute of International Finance (IIF), and the International Swaps and Derivatives Association (ISDA) provides comments to the Basel Committee on the Basel Committee on Banking Supervision’s (BCBS) proposal on changes to the treatment of extraordinary monetary policy operations in the Net Stable Funding Ratio (NSFR).

 GFMA, the Institute of International Finance (IIF), and other associations submitted a supplemental comment letter to the Basel Committee on Banking Supervision (BCBS) to emphasize serious concerns with the treatment of equities under the BCBS’s consultative document on the revised Net Stable Funding Ratio (Revised NSFR), and the impact such treatment will have on the market and market participants. 

Prior to the supplemental comments, the trade associations submitted a comment letter to the BCBS on April 11 in response to the BCBS’s Revised NSFR. The groups continue to continue to strongly support the comments raised in the prior letter, including the equities-related comments. Therefore, none of the points outlined in the supplemental letter should be construed to supersede or override any of our original requested alternative treatments for equities or non-equities instruments.

 Related Material

Prior Comment Letter: GFMA Submits Comments to the BCBS for the Consultative Document on Basel III and the Net Stable Funding Ratio (April 11, 2014)

BCBS, Basel III: The Net Stable Funding Ratio (January 2014)

GFMA provides comments to the Basel Committee on Banking Supervision (BCBS) on proposals set out in the Consultative Document Basel III: the Net Stable Funding Ratio (NSFR) published by the BCBS on 11th January 2014 (Consultation Paper).

This letter sets out GFMA’s detailed points on securitisation only, and is intended to supplement the broader letter of even date submitted by the Institute of International Finance (IIF), the GFMA and others.

GFMA agrees with the BCBS that securitisation, prudently deployed and sensibly regulated, can make a very positive contribution to a bank’s overall liquidity management. GFMA requests that the Committee engage in a similar way with the industry in this, relatively new, context of the NSFR in order to achieve a treatment of high quality securitisation that accurately recognises its strong credit performance through and since the financial crisis as well as its benefits as a self-liquidating funding tool for the real economy.