Other observers, meanwhile, are saying that it should no longer be possible to use internal risk models for calculating regulatory minimum capital requirements. Standards, they say, should be based more on a kind of “raw leverage ratio” – that is, a straightforward leverage ceiling for credit institutions without any exemptions for purportedly low-risk retail business, say, and without netting agreements etc.
[18] The annual gross savings for banks from the two-tier system are estimated to amount to up to € billion in 2020 compared with the counterfactual projection if the system had not been introduced. These savings more than offset the additional gross excess liquidity charge of around € billion that resulted from the September cut of the deposit facility rate by 10 basis points.