New bank rules
You're referring to the new banking regulations! There have been several changes in recent years, and I'll try to summarize some of the key ones:
1. Dodd-Frank Act (2010): This US law aimed to promote financial stability and prevent future crises. It introduced stricter regulations on banks, including:
- Higher capital requirements
- Enhanced risk management
- Increased oversight by regulators
- Restrictions on proprietary trading and conflicts of interest
2. Basel III (2010): This global banking standard sets minimum capital requirements for banks, aiming to ensure they can withstand financial shocks. Key provisions include:
- Higher minimum capital requirements (8% of risk-weighted assets)
- Countercyclical capital buffer (to absorb losses during economic downturns)
- Liquidity requirements (to ensure banks can meet short-term funding needs)
3. European Union's Capital Requirements Directive (CRD IV) (2013): This directive harmonized banking regulations across the EU, introducing:
- Higher capital requirements (9.5% of risk-weighted assets)
- Enhanced risk management and governance
- Increased transparency and disclosure
4. Bank Secrecy Act (BSA) and Anti-Money Laundering (AML) regulations (2015): These regulations aim to prevent money laundering and terrorist financing by:
- Requiring banks to identify and report suspicious transactions
- Implementing enhanced due diligence for high-risk customers
- Increasing transparency and cooperation between financial institutions and regulators
5. Stress Testing (2013): This regulation requires banks to conduct regular stress tests to assess their ability to withstand severe economic scenarios. This helps regulators identify potential vulnerabilities and take corrective action.
6. Liquidity Coverage Ratio (LCR) (2014): This regulation requires banks to maintain a minimum level of liquid assets to meet short-term funding needs during times of stress.
7. Net Stable Funding Ratio (NSFR) (2014): This regulation aims to ensure banks maintain a stable funding profile by requiring them to hold a minimum amount of stable funding relative to their assets.
These are just a few examples of the new bank rules and regulations. The specific requirements may vary depending on the country, region, or type of bank.