Financial Services Regulatory Authority of Frankfurt Issues Guidelines on the Needs for Financial Competence of Banks

Frankfurt, Germany, March 18, 2011 --(PR.com)-- Included in the new guidelines are Financial Services Regulatory Authority of Frankfurt existing practices which are enhanced to specify transparent terms for the financial competency needs of the banks in some specified areas such as potential risks of losses from bank lending, financial troubles of the clients, substantial exposures and concentration of the banking activity to a single sector.

“In response to the burgeoning solvency needs of the banks, we are hoping that these newly enhanced guidelines will contribute to much greater transparency about the clients; expectations on how the financial institutions appraise their needs for solvency. Our guidelines are taken and reflected from our present regulatory approach and practices,” said Jack Yoseff, Financial Services Regulatory Authority of Frankfurt Director General.

After the consultation with the banks, Financial Services Regulatory Authority of Frankfurt adapted numerous and detailed technical suggestions made by the financial industry. These suggestions include the level of stress relating to fall in share process and lessened falls in profits from banks fees and other charges. Nevertheless, the guidelines concerning the credit risks and the possibility of lending losses remain untouched.

"Credit risks are the principal component in the solvency needs of the financial industry. As we have recently released an statement that we will not going yet to tighten the capital requirements at present because we still take into consideration the drastic effects of the economic downfall and with that statement, we stand by it. However, it would be immature to loosen the capital requirements," explained Yoseff.

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