SBA position on Basel Committee's Consultative Proposals

• The SBA attaches the utmost importance to the stability of the financial system. The SBA therefore acknowledges the need for additional measures in the area of capital and liquidity requirements.
• It is important that regulation allows for differentiation by taking into account the various types of banking business models and that it also demonstrates a commitment to the principle of the level playing-field.
• Care must be taken to ensure that the proposed measures do not cumulatively give rise to any negative effects which could be counterproductive, in particular for the real economy.
• In particular, the SBA believes there are weaknesses in the proposal for a leverage ratio. The SBA suggests amendments with regard to the treatment of netting, off-balance-sheet items and credit derivatives.
• Finally, the SBA believes it is important to allow a generous amount of time for implementation deadlines and also to create provisions for grandfathering”.
• Given the complexity of the subject matter the SBA expects there to be a further opportunity to comment following the Quantitative Impact Study.

The SBA’s full consultative paper on the proposals is available in English here.