January 11, 2013

Basel III sends some back into overheated ovens while leaving others out in arctic colds.

Sir, Mary Watkins and Ralph Atkins title their report on the Basel regulators allowing “highly rated…securities backed by mortgages on homes to be included in liquidity buffers that banks will have to hold”, as “Mortgage-backed securities come in from the cold” January 11.

Has everyone already forgotten that it was precisely that kind of regulations, the allowing of absurd low capital requirements for this type of highly rated securities that set us up for the current crisis? And now the regulators want to send these securities back to the ovens, even increasing the temperature by adding the liquidity requirements based on perceived risk? Sincerely the regulators remain as loony as back in June 2004 when they launched their Basel II!

And, again, where do the regulators get to think they are authorized to send those who because they are perceived as “The Risky” already find themselves in the cold, into extreme arctic colds? Can’t they understand that “The Risky”, the unrated or the not- so-good-rated small and medium business and entrepreneurs, are those we most need to care for and nurture when the real economy goes through difficult times? Sincerely, in the name of all those who will not be able to find employment because of these regulations…Damn the regulators!