Public consultation on possible measures to strengthen bank capital requirements for counterparty credit risk

February 9, 2011

The European Commission has launched a public consultation on possible measures to strengthen bank capital requirements for counterparty credit risk.

The purpose of the measures proposed in this consultation is to strengthen the capital requirements for counterparty credit exposures arising from credit institutions' and investment firms' derivatives, repo and securities financing activities. Specifically, their objective is to raise the amount of capital backing these exposures, reduce procyclicality and provide additional incentives to move OTC derivative contracts to central counterparties (by requiring more capital for OTC derivatives not cleared by a CCP than for those cleared by a CCP), thus helping reduce systemic risk across the financial system.

Responses to the consultation will be received until March 9, 2011.