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Basel Committee release on IAS 39 and regulatory capital

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09 Jun 2004

The Basel Committee has posted on its website a Press Release (PDF 18k) announcing the Committee's recommendations to national bank regulators that two amounts that are reported in equity under IAS 39 not be considered part of a bank's Tier I or Tier II capital for regulatory purposes: The cumulative fair value gains and losses on cash flow hedges of financial instruments measured at amortised cost Gains and losses arising from changes in an institution's own credit risk as a result of applying the IAS 39 fair value option to its liabilities. The release also notes that "application of the fair value option may raise other, additional supervisory concerns with respect to regulatory capital." .

The Basel Committee has posted on its website a Press Release (PDF 18k) announcing the Committee's recommendations to national bank regulators that two amounts that are reported in equity under IAS 39 not be considered part of a bank's Tier I or Tier II capital for regulatory purposes:

  • The cumulative fair value gains and losses on cash flow hedges of financial instruments measured at amortised cost
  • Gains and losses arising from changes in an institution's own credit risk as a result of applying the IAS 39 fair value option to its liabilities.
The release also notes that "application of the fair value option may raise other, additional supervisory concerns with respect to regulatory capital."

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