The Basel III Framework and Digital Market Infrastructures

Industry Article

The Basel III Framework and Digital Market Infrastructures

Former Basel Committee Secretary General, Bill Coen, discusses the Basel III Capital Framework, market infrastructure, crypto and digital assets with Baton's President, Jerome Kemp.


Now working with Baton as a Senior Advisor, Bill Coen was one of the principal architects of the Basel III Framework, a set of measures designed to strengthen the regulation, supervision and risk management of banks.

Asked by Jerome about the drivers of the Committee’s thinking post- Global Financial Crisis as it embarked upon the revision of the regulatory capital, which comprised the bulk of the Basel III reforms, Bill ‘s response is unequivocal. 

“Some of our thinking,” he says, “was driven by the glaring inadequacies of the existing framework. The reforms that we made were readily apparent and needed, like the amount and quality of capital.” 

“It’s imperative for regulators to keep up with the  times and to have a high awareness of growing risks and bank practices, as well as market developments.”
– Bill Coen

Bill describes some of the reforms as ‘searing lessons’ from the Global Financial Crisis, citing in particular the credit and operational risk frameworks as well as market risk, subsumed under ‘The Fundamental Review of the Trading Book (FRTB).’


Watch the Interview with Jerome Kemp & Bill Coen

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Citi’s Mariam Rafi Discusses the Importance of Optimised Collateral Management

Industry Article

Citi’s Mariam Rafi Discusses the Importance of Optimised Collateral Management

Mariam talks to Jerome Kemp, Senior Advisor to Baton Systems, about the evolution and importance of the role of collateral within the broader clearing context.


Asked about the reasons for the interest in collateral movements in recent years, Mariam comments that there has been a marked increase in the amount of collateral moving through the system as more of the market has moved to central clearing.

Demand for collateral, she says, is also increasing with the non-cleared margin rules on the horizon which will impact a number of Citi’s clients in September. Added to this, the COVID volatility of spring 2020 highlighted other factors around collateral usage such as margin procyclicality of the CCPs, and increased firms’ liquidity needs.

“We have been very focused on figuring out how to use both the collateral that clients post to us, and our own liquidity resources, in the most effective manner,” Mariam says.

“We can be much more nimble about using client collateral on an intraday basis.”
– Mariam Rafi

Broadening the scope of collateral that firms can use for their liquidity needs is becoming an increasingly important theme. “Flexibility to post collateral in its various forms is becoming more and more important to our clients,” Mariam says.

“CCPs are broadening their collateral scope to include a broader range of products. “As an FCM we need to be very nimble in keeping up with the growing range of assets which our clients want to be able to post to meet their margin requirements.”

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