Infographic - Discussion Paper: A more effective capital framework for a crisis accessible version

Box 1 – Key outcomes

  • Improved capital effectiveness – Fewer uncertainties and complexities that could undermine confidence, and hinder recovery or resolution.
     
  • Reduced compliance costs – Banks are no longer subject to the regulatory burden around design, marketing and issuing of AT1.
     
  • Enhanced proportionality – A simpler approach and lower capital requirements for smaller, domestic banks.

Box 2 – Current vs proposed frameworks

  • Simplifying the capital framework by replacing AT1 with other existing, more reliable forms of capital.
     
  • Includes a graphic that depicts the minimum regulatory capital requirements and capital buffers into column graphs.
     
  • Banks are required to meet the capital conservation buffer (CCB), domestic systemically important bank (D-SIB) buffer, and the countercyclical capital buffer (CCyB) with Common Equity Tier 1 (CET1) Capital. These capital stacks exclude additional loss-absorbing capacity requirements.

Box 3 – Expected impacts from the proposals

  • Financial system – Greater confidence and certainty in crisis response
     
  • Banks – Simple and proportional implementation
     
  • Investors – Orderly adjustment, with no immediate impact on existing AT1

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