GFIA responds to IAIS second BCR consultation

8 August 2014

GFIA’s response to the Basic Capital Requirement (BCR) consultation has indicated that the effectiveness of the proposed BCR is heavily dependent on the calibration of the alpha scalar as well as the design of the Higher Loss Absorbency (HLA), and how it will they will apply together with the BCR.

Other concerns noted in the GFIA’s response included the aggressive timeline for development of the BCR, the lack of clarity around the relationship between the BCR and International Capital Standard (ICS), and the principle that "G-SIIs should hold higher levels of capital than would be the case if they were not designated as G-SIIs”, which the GFIA believes could be misunderstood to mean the G-SIIs should automatically hold more than required under their local requirement.

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