37 - Repo-style transactions and capital adequacy requirements. Collateral, capital adequacy requirements and supervisory policies

Wetenschappelijke publicatie
Publicatiedatum 1 mei 2001

When focusing on banks’ repo businesses, it appears that the regulatory approach has gradually developed around two main themes: the role of collateral in repo-style transactions and the supervisory attention given to different risk categories. The regulatory treatment of collateral has recently entered a new phase, in the form of the revision of the Basel Accord. A wider range of collateral will be allowed by the new Accord and banks will be able to choose between a comprehensive and a simple approach for the treatment of collateral. The revision of the Basel Accord is expected to improve further the regulatory treatment of collateral and the risks associated with repo-style transactions.