The Basel III rules seek to prevent banks from using a deterioration in their own creditworthiness to boost common equity. This consultation paper from the Basel Committee on Banking Supervision (“BCBS”) sets out an approach to the application of the relevant rules. After considering various options, the BCBS has decided that most are flawed, and as such it proposes that debt valuation adjustments should be fully deducted from calculations of tier 1 equity. This option is “more conservative” than the original paragraph in Basel III, but is “transparent and simple”.