Bahrain clarifies Basel III capital rules

Updated 28 May 2014
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Bahrain clarifies Basel III capital rules

DUBAI: Bahrain has become the first country in the Gulf outside Saudi Arabia to clarify its treatment of capital-boosting instruments under Basel III rules, saying the instruments must include loss absorption features.
Its decision, which is in line with Saudi Arabia, a member of the committee which drafted Basel III, could influence regulators in other Gulf states that have not yet clarified their stance, such as the United Arab Emirates and Qatar.
Banks across the Gulf have been waiting for regulatory guidance on how subordinated debt instruments will be treated under Basel III, a set of stricter banking rules which are being phased in around the world over the next several years.
It is up to each national regulator to decide how to interpret the rules; Bahrain's central bank has drafted separate rule books for conventional and Islamic banks, proposing they both come into effect in January 2015.
Its rules detail the treatment of subsidiaries when calculating a bank's capital adequacy requirements and explain the use of subordinated debt, which can count towards Tier 1 core or Tier 2 supplementary capital.
Loss absorption is a requirement for capital-boosting instruments to be converted into equity if the issuer faces insolvency. Bahrain would require Tier 1 instruments to absorb losses either by converting them into common shares, or through a gradual write-down mechanism which forces losses on holders of the instruments in stages.
So far, Bahraini banks have not issued subordinated debt, in part because of a lack of regulatory guidance. Saudi Arabian banks have seen a flurry of such issuance since last year, when the regulator started implementing Basel III.


Tesla shares fall after CEO Musk abuses British diver

Updated 17 July 2018
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Tesla shares fall after CEO Musk abuses British diver

  • The billionaire entrepreneur’s spat with British diver Vernon Unsworth started last week, after rescue teams rejected Musk’s offer of a mini-submarine created by his rocket company SpaceX
  • Musk gave no evidence for alleging Unsworth was a pedophile

NEW YORK: Shares of Tesla Inc. fell 2.75 percent on Monday after Chief Executive Elon Musk directed abuse on Twitter at one of the British cave divers involved in the rescue of 12 Thai children last week.
A number of analysts and investors, requesting anonymity, told Reuters that Musk’s comments are adding to their concerns that his public statements are distracting him from Tesla’s main business of producing electric cars. The stock sell-off knocked almost $2 billion off the company’s market value.
Tesla shares closed at $310.10 before rising 1.9 percent in after-hours trading.
James Anderson, a partner at Tesla’s fourth-largest shareholder, asset manager Baillie Gifford, called the weekend’s events “a regrettable instance” and said he had reiterated to the company the need for “peace and execution” of its core business.
The billionaire entrepreneur’s spat with British diver Vernon Unsworth started last week, after rescue teams rejected Musk’s offer of a mini-submarine created by his rocket company SpaceX to help rescue a 12-member soccer team and their coach trapped inside a flooded cave in the northern province of Chiang Rai.
“He can stick his submarine where it hurts,” CNN reported Unsworth as saying. “It just has absolutely no chance of working.”
Musk shot back on Sunday on Twitter: “We will make one (video) of the mini-sub/pod going all the way to Cave 5 no problemo. Sorry pedo guy, you really did ask for it.” The tweet was later deleted.
Tesla spokespeople and lawyers did not respond to emails and phone calls from Reuters requesting comment on Musk’s comments on Twitter.
Musk gave no evidence for alleging Unsworth was a pedophile. Unsworth said he would consider taking legal action against Musk over the remarks, in comments filmed in Chiang Rai on Monday by Australia’s 9News. Reuters could not reach Unsworth for comment.
Unsworth’s wife told Reuters on Monday that her husband was returning to Britain on July 19, where he will speak to lawyers.
Last week, Narongsak Osottanakorn, the leader of the rescue operation in Thailand, rejected Musk’s mini-submarine as not suitable for the task. Musk responded on Twitter on July 10, calling Osottanakorn “not the subject matter expert.”
Musk also regularly uses Twitter to criticize media reports on Tesla, which has struggled to meet its own production targets for its Model 3 sedan, which is seen as key to the company’s profitability.