BANKTHINK

You Call That Liquid? New Basel III Liquidity Rules Ineffectual

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Comments (10)
She's clueless
Posted by rose1 | Monday, January 07 2013 at 1:08PM ET
She's clueless
Posted by rose1 | Monday, January 07 2013 at 1:08PM ET
Danged if you do, darned if you don't. If we pass the rules to be implemented fully in 2015 and banks tighten credit even more to account for the new liquidity buffer, Washington cries foul and that banks are restricting credit to the needy (aka. not credit-worthy). If we extend the rules til 2019 to give banks more time to build those reserves, Washington cries foul and that banks are pushing off needed reforms. When you're the public whipping post there is no right way to do something.
Posted by BankerBud | Monday, January 07 2013 at 2:57PM ET
Banks didn't fail beacuse they were illiquid: they were insolvent.
If the price of mortgage securities can plummet 50% in the blink of a computer screen, how is that "liquid?"
Posted by kvillani | Monday, January 07 2013 at 3:12PM ET
It is much worse than that. Liquidity requirements based on perceived risk add a new layer of regulatory subsidy to The Infallible which translates into a regulatory tax of "The Risky", precisely those on the margin the most important actors in the real economy.


The Basel regulatory mantra persist being save the banks above all and do not care one iota if everything else goes under.


http://teawithft.blogspot.com/2013/01/basel-keeps-tightening-noose-around.html
Posted by Per Kurowski | Monday, January 07 2013 at 3:35PM ET
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