Daily News: January 7, 2015

Basel III Among Top Market Issues to Watch

The continued phase-in of Basel III for U.S. banks is a top trend that will impact the structure of global financial markets in 2015 and beyond.

In a new report, 15 for ’15 Top Trends to Watch in 2015, Greenwich Associates identifies shifts in regulations, market practice and technology with the potential to change the way investors and the financial firms that service them do business.

In addition to an expected move by the U.S. Federal Reserve to increase interest rates and a subsequent pick-up in volatility, the list includes several issues, one of which is Basel III.

U.S. banks will get a real taste of Basel III with the required disclosure of Supplementary Leverage Ratios (SLR) — the U.S. interpretation of leverage ratio requirements defined by Basel III.

“This new disclosure requirement will finally give the market a more apples to apples comparison of bank leverage,” says Kevin McPartland, head of Market Structure Research at Greenwich Associates. “As the last few years have taught us, disclosure brings with it questions, and questions often lead to change.”