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Events Come see Second Pillar Consulting at the RMA Retail Risk Conference in Chicago June 23. Click here for brochure.
Second
Pillar Consultingwill be teaching the course "Enterprise Risk
Management for Community Banks" on June 24-25 in Chicago. Click here for more details.News
Stories
"Stress Test Results: Regional & Community Banks to See Harsher Exams, Investor Flight"; Jonathan Stern; Financial Crisis Advisor (FinCri), May 17, 2009. click
here
-- Insightful article that suggests regulators are becoming more
rigorous in their capital examinations of banks including trying
to apply the stress testing methodology used at the 19 large
banks to smaller institutions. However, these will be
applied without the benefit of custom tailored loss information.
"Capital Rules on Deck, Banks Weigh Cost of Basel Participation"; Jonathan Stern; Financial Crisis Advisor (FinCri), May 11, 2009. click
here
-- Discusses the continuing Basel II preparations of banks and regulators.
"Agencies
Mull New Capital Regs While Fed Tells Banks to Shore up Capital
Management"; Jonathan Stern; Financial Crisis Advisor (FinCri), April
20, 2009. click
here
-- Discusses SR 09-4 and the steps banks are taking to ensure
that the quality of their capital management justifies dividend
payments.
Papers
"Capital
Windfall?"; Geoffrey Rubin and William Nayda, American Bankers Association
Banking Journal, October 2008. click
here
-- Asses the potential impact of Standardized Basel II on US banks and finds that
over three quarters of banks obtain capital relief. Findings also indicate that savings will differ
by
region and bank charter type. The article also provides an example of the
capital
savings for a typical US bank, which can also be found here click here.
"Capital
Arbitrage
Across and Within the Various U.S Regulatory Capital Regimes",
Geoffrey
Rubin and William Nayda; RMA
Journal, November 2008. click
here
-- Compares the regulatory rules of the Basel I, US Standardized Basel II, Foreign US Standardized Basel II,
and
Advanced Basel II. Great reference for
banks,
consultants, and regulatorys that need to anticipate the
substance and effect of rules across various capital regimes.
The paper highlights the potential
capital arbitrage that may result from a bifurcated system.
State
Banking Articles These
articles provide an overview of Standardized Basel II and explain the
impact on banks in each state. The capital impact on a typical
state bank is detailed, and a list of banks in each state that benefit
the most – and least – from the regulation are provided. Ask your
state banking association to contact Second Pillar Consulting if you
want to see a similar article written for your state.
Nebraska
“The
Impact of
Standardized Basel II on Nebraska Banks”;
Geoffrey Rubin and William Nayda; Nebraska
Bankers Magazine, January-February Issue, pages
8-10. click
here
Ohio
"Banking on the Basel"; William Nayda and Geoffrey Rubin; Ohio
Economic Trends, 3rd Quarter 2008 Report; Chmura Economics
and
Analytics. click
here
Pennsylvania
“Basel
II Regulation”;
Geoffrey Rubin and William Nayda; PABanker,
Nebraska January-February Issue, pages 59-62. click
here
Virginia
"Banking
on the Basel"; William Nayda and Geoffrey Rubin; Virginia Economic
Trends, 3rd Quarter 2008 Report; Chmura Economics and
Analytics. click
here
Impact Analysis by State
Basel II implications
by state also presents the impact to a median bank in the state.
Click on a state to view the PDF.
Presentations
"Capital and
Risk Management in a Stressed Economy"; Presented to
the Richmond Association of Business Economists, March 20,
2009. click
here
"The
Impact of Standardized Basel II on Delaware Banks";
Presented to
the Delaware Bankers Association, October 1, 2008. click
here
"Regulatory
Capital Requirements for Community and Regional Banks";
Presented at the RMA Annual Risk Management Conference in Baltimore, MD OCT 18-21, 2008.
click
here
"Understanding
Recent Market Changes", William Nayda, Presented to the Virginia Resource
Authority, October 3, 2008. click
here
Full text of the SR 09-4 Supervisory Guidance, "Applying
Supervisory Guidance and Regulations on the Payment of Dividends, Stock
Redemptions, and Stock Repurchases at Bank Holding Companies"
http://www.federalreserve.gov/boarddocs/srletters/2009/SR0904.htm
The draft Standardized
Basel II rules are contained in the Notice of Proposed Rulemaking:
http://edocket.access.gpo.gov/2008/pdf/E8-16262.pdf
A good synopsis of
Standardized Basel II and the primary differences with existing rules
can be found here:
http://www.federalreserve.gov/boarddocs/meetings/2008/20080626/staffmemo.pdf
The rule governing the application of Advanced Basel II in the US was
published in the 12/7/2007 Federal Register:
http://edocket.access.gpo.gov/2007/pdf/07-5729.pdf
The Bank of International
Settlements is the collection of North
American, European, and Japanese central bankers that finalized the
Basel II Accord:
http://www.bis.org/publ/bcbsca.htm
General information on
Basel II at wikipedia:
http://en.wikipedia.org/wiki/Basel_II
The Federal Reserve
maintains a collection of general Basel II information:
http://www.federalreserve.gov/generalinfo/Basel2/
The American Bankers
Association issued a statement on Basel II:
http://www.aba.com/Industry+Issues/Basel_II.htm
The Independent Community
Bankers of America issued a letter on Basel II:
http://www.icba.org/advocacy/lettershilldetail.cfm?ItemNumber=35756
The fourth quantified
impact study estimated the magnitude of capital savings for large banks
adopting the
Advanced approach:
http://www.occ.treas.gov/ftp/release/2006-23a.pdf
The consulting firm Ernst & Young published a study on Basel II
business implications:
http://www.ey.com/global/download.nsf/International/Basel_II_Survey_Report_2006/$file/
EY_GFSRM_Basel_II_Survey2006.pdf
The consulting firms
Accenture, SAP, and Mercer Oliver Wyman published this joint study on
Basel II costs:
http://newsroom.accenture.com/article_print.cfm?article_id=4123
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