...which was a question asked of me a number of years ago. "Nothing," said I. It appears things haven't changed much
The boys (and now some girls) got together on Sunday at the BIS to agree on Basel III which is to govern the world's banking sector for the foreseeable future. Low and behold, agreement was reached but on what, no one is really sure. There is to be a gfadual phase-in of new capital reqirements which reportedly will require all banks to have primary capital levels of 7% by 2019 which was a compromise between the Germans who wanted 2020 and the Americans who were hlding out for 2018...or so it was reported. Damn! send this mob to the middle east to work with the Arabs and the Israelis: These guys are good! The suit is already taking credit for the proceedings. Of course there are a few definitional issues that are supposed to be cleared up by 2023--year, you heard that right--but the number that is being bandied about is 7% of common equity for all banks except perhaps for those that are deemed to be "systemic" which of course nobody quite understands what that means or how it will be defined. All of this comes as a result of the great crash of 2008--continuing into today--and is designed to insure that this will never happen again. We shall have piece in our time. Of course, what everyone at the meeting knows, except for the pols like The Suit and the Euro equivalents of the same--is that if one ever faces a similar set of circumstances again the only percentage of capital that counts is 100% and the rest is a total nonsense. Further, the Euros and the Asians, who use their banking systems as implementors of their fiscal policies will ignore the rules as they see fit and leave us in the dust, will proceed merrily along. America once again will sleep the sleep of the just and the deluded. Somewhere down the line there will be another George Bush to blame when it all goes wrong again. We have 8,000 banks, near banks, financing companies, Fanny and Freddie and God knows what else is going to pop up between now and 2023. And they are ALL interconnected and in some way golbally exposed! We deserved better I suspect but I must admit I don't have all the details and maybe I'm just too jaded at this point to be anything but skeptical. Hopefully, I shall be set straight over the next few days but I'm not holding my breath. If I am, I'll pass it on. In the mean time, I'm going back to the fiscal debate of the coming election over the next few days.
From themindless to the...
No comments:
Post a Comment