BIS official questions EU's treatment of sovereign-debt risk

10/27/2011 | Global Financial Strategy

Herve Hannoun, deputy general manager of the Bank for International Settlements, said sovereign debt should not be given a zero risk weight, as it is under the EU's Capital Requirements Directive. "The global sovereign-debt crisis has exposed fault lines in the regulatory treatment of sovereign risk," Hannoun said. "However, the deficiency is not in the Basel standards but in the way the global standards have been applied in some countries and especially in the European Union."

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