Central clearing obligations cause collateral headaches in Asia
The relaxation of the LCR partially addresses the liquidity concerns of Asian banks over Basel III, but as the region moves towards the central clearing of over-the-counter derivatives concerns over the availability of the right sort of instruments remain
Bank share prices have been a source of abject misery in recent years but CEOs and investors alike received a fillip with the January 7 decision by the Basel Committee on Banking Supervision to relax the approach for the liquidity coverage ratio (LCR). UK industry stalwart Barclays saw a near 4% increase in its share price in a single day while the Stoxx Europe 600 Banks Index hit a 17-month high. The effect on Asia’s better capitalised banks was less obvious: DBS for example saw a slight dip to
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