Let us pray it is not too late.
Sir Peter Thal Larsen reports January 21 that the “UK regulator helps to ease the pressure” lowering the capital requirements for banks when at the “low point of the cycle”. Not a minute too late.
Requiring higher capital when already awarded credits are being discovered to be more risky than previously thought, and allowing lower capital when credits could be perceived to be less risky, is one of the fundamental ways how the financial regulators that were responsible for the Basel framework created and leveraged new cyclicality for the world to suffer. Shame on them!
Listening to their “we did not know” is just the reason we do know that bank regulations must not be allowed to remain an exclusive and reserved affair for bank regulators.
Requiring higher capital when already awarded credits are being discovered to be more risky than previously thought, and allowing lower capital when credits could be perceived to be less risky, is one of the fundamental ways how the financial regulators that were responsible for the Basel framework created and leveraged new cyclicality for the world to suffer. Shame on them!
Listening to their “we did not know” is just the reason we do know that bank regulations must not be allowed to remain an exclusive and reserved affair for bank regulators.
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