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Basel III requirements now relaxed. We are sick of WIMP REGULATORS...no way you lot!

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Well, gee that did not take long did it? The banksters lobbied that "this is just too hard for us", "it's going to affect our bottom line", "our profits for our stakeholders will not be there", blub, blub, blub, crying into their breakfast weeties! The banking cartel do not like anything that means they have to play by some rules....for a change.

The news is being released on the internet newswires. Well, I did start to see it yesterday but now some in Australia are just posting it. For me, it just reeks of the typical behaviour. Regulators scream we need tighter rules, greater accountability, etc, etc, blah, blah. Someone dreams them up. They get written up. Then the banking cartel sneakily lobbies the pollies & regulators. Viola! They get relaxed. And  - - - around the wheel we go again . . . .

Effectively, it goes like this:

"A group of the world’s top regulators and central bankers has agreed to relax global liquidity standards after pressure from the banking industry.

The Basel Committee on Banking Supervision has made it easier for banks to meet the “liquidity coverage ratio” (LCR), and delayed its full implementation until 2019  (Why have they been given 7 more years?) 

“The LCR is one of the Basel Committee’s key reforms to strengthen global capital and liquidity regulations with the goal of promoting a more resilient banking sector,” a statement from the Bank for International Settlements said.

“The LCR promotes the short-term resilience of a bank's liquidity risk profile. It does this by ensuring that a bank has an adequate stock of unencumbered high-quality liquid assets that can be converted into cash easily and immediately in private markets to meet its liquidity needs for a 30 calendar day liquidity stress scenario. It will improve the banking sector's ability to absorb shocks arising from financial and economic stress, whatever the source, thus reducing the risk of spillover from the financial sector to the real economy.”

The deadline for meeting 100 per cent of the requirement is now 1 January 2019. Banks will have to meet 60 per cent of the required liquidity by 2015, the original deadline.

Australian banks, however, will have to wait and see if the Australian Prudential Regulation Authority (APRA) will endorse the amendments.

According to a report in The Australian newspaper, a Commonwealth Bank spokesperson said “this is an interesting development, but the impact on Australian banks will only be known once APRA has come out with its guidelines, which may be different.”

APRA has thus far declined to comment." Hmmm  . . . I wonder why? Perhaps, they're waiting for the pollies to come back from their christmas breaks before they know what they are allowed to say.

This was from yesterday's news:

"Over the weekend, chief central bankers in Europe quietly eased the restrictions within the two-year old Basel III regulations. It addition to pushing back the liquidity deadline for banks four years, the new rules loosened and cut a number of strings and widened the net of allowable corporate debt.

They also likely gift wrapped a kinder package to banks in emerging markets, particularly those close to stingier Western European banks.

For some time, several voices have criticized the Basel Committee for giving the developing world a short stick. A Western bank peg shoved into a square hole, if you will. During the summer, a financial taskforce helmed by a Standard Charter executive, claimed that Basel III would “damage” emerging market growth. With less mature, more illiquid markets, banks in Asia, Latin America and the Middle East face greater risks and constraints as they catch up to the Basel standards. India, for instance, was very likely on the path to a bank crisis as it tried to stay in line.

 

If the original rules weren’t nixed this weekend, we would have heard more of this chatter as we approached the original 2015 liquidity D-day. One researcher for the Asian Development Bank Institute already offered the oblique argument that India should avoid a “blind adherence” to Basel III standards.

The renewed rules are projected to soften the blow for countries like India. They will do so not only by easing lending, but by relaxing trade finance restrictions on which emerging markets more readily lean. (Do note that banks in these countries may not benefit as swiftly as British ones, a la Barclays, which scored [via Counterparties] a 4 percent pre-tax profit virtually overnight, do.)

For emerging market banks, Basel III was reportedly redrawn to give them more working assets, time and room to catch up. But it also could, as a former regulator told Reuters, just serve as an excuse to put off very necessary reforms." Ah ha! Somebody is awake to it . . .

 

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  • doyla66
    doyla66 Sunday, 13 January 2013

    Bank secrets hidden. APRA warns releasing information "may affect the stability of Australia's economy"
    To new readers of this site. I blogged about this article in November 2012 if you would like to read it.

  • doyla66
    doyla66 Sunday, 13 January 2013

    APRA SHOULD HAVE THOUGHT OF THAT BEFORE ALLOWING THE BANKS OPEN SLATHER.

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Guest Sunday, 25 October 2020