December 31, 2012

On January 1, Basel III, the bank regulatory cliff, will just make it all so much worse

Sir, Simon Greaves, in World Diary, December 31, for Tuesday 1 reports “Better bank standards: Key proposals of the Basel III framework of global capital standards for banks become law. Eleven member jurisdictions have published a final set of regulations effective from today… The Basel III package introduces new prudential requirements - capital buffers, a leverage ratio and liquidity requirements”.

But no!, since the capital requirements will still be based on the perceived risks, and now the liquidity requirements will too, we can only expect that the effective discrimination against “The Risky” and in favor of “The Infallible” to persist and increase, and with that the damage this causes to the real economy.

Frankly, in a world with so many concerns, where did the sissy bank regulators get it that their petit bourgeois baby boomer concerns should be prioritized?

Forget about the "Fiscal cliff" this Basel III cliff is much more dangerous