QOTD -- Macropru + IFRS

Most days, we use our Daily Momentum Measurement to spot inflection points and seismic shifts in global macro policy. But sometimes, shifts are incremental and technical.

February is traditionally the month in which global public policy processes ramp up for the year. In 2020, the process is turbo-charged by policymakers preparing for the UK's formal exit at the end of the year. And so we have seen European financial regulators making important technical moves on February 20 (regarding the shift away from LIBOR pricing benchmarks) and February 18 (regarding bank resolution standards).

Today's incremental, technical move occurs at the intersection of regulatory accounting standards and bank regulatory capital standards.

As earnings season kicks into high gear, European macroprudential supervisors have issued a start warning about how regulators and accountants need to approach the treatment of regulatory capital instruments in the context of the leverage ratio and the Fundamental Review of the Trading Book.

Strategists and analysts keeping track of these developments at this technical level will be best placed to maximize opportunities (and identify risks) for their firms.

But beware -- regular use of this platform and process may help you keep track of how the technical details generate little-noticed shifts in policy....but it may also cause some of your colleagues to believe you have a crystal ball. Enjoy.

For more on how these technical moves can enhance your nowcasting capabilities, please see this recent blogpost HERE.


These insights were acquired and powered by BCMstrategy, Inc.'s patented policy risk measurement process which delivers daily momentum measurements for global market activity regarding key issues as well as time series data which is not depicted above. For more information on how the platform can accelerate your ability to identify strategically significant developments please contact us. If you would like to join our free and open Slack channels, we will be glad to send you an invitation if you reach out to us.