Official: BASEL 3 liquidity rules eased

Thrugelmir

DiggerUK wrote: »

They are not international rules, they are options for sovereign states to implement; or they can simply ignore them, just like the 'Pirates Code'

The G20 have agreed to make Basel mandatory. Given this covers all the worlds major banks. Unsure that this will effect the UK in any form. Should others wish not to comply.

Generali

DiggerUK wrote: »

This thread has gone a long way from Basel. I am wondering if the significance of these guidelines has got home.
They are not international rules, they are options for sovereign states to implement; or they can simply ignore them, just like the 'Pirates Code'

I would be more convinced that these guidelines had been studied by any posters here, if the difference between Tier 1&2, and Level 1&2 Assets was acknowledged.

All we seem to have ended up with, is an angels on the head of a pin debate about interest rates.
..._

They are not international rules but it is an agreement between the Central Banks of the world's largest economies to act in a certain way.

If one country refuses to introduce the rules to give their banks a competitive advantage the whole deal will fall apart. That, AIUI, was the reason behind the renegotiation: the Americans were refusing to implement what had been agreed and many European countries couldn't implement the rules.

Thrugelmir

Generali wrote: »

If one country refuses to introduce the rules to give their banks a competitive advantage the whole deal will fall apart. That, AIUI, was the reason behind the renegotiation: the Americans were refusing to implement what had been agreed and many European countries couldn't implement the rules.

Merv didn't express concern at the announcement.

One suspects as it enables the UK banks to build the £5 to £35 billion buffer of capital. The BOE believe is required to absorb ongoing issues such as PPI and Libor fines etc. .

DiggerUK

Thrugelmir wrote: »

Merv didn't express concern at the announcement......

Considering that he is the chair of the committee that made the announcement, why so surprised?

As to the G20 making B3 mandatory.....when did they suddenly become the legislative body for all the sovereign states in the world.
Leaky QE and Zirp rate lifeboats are all launched and away, it's every soul for themselves to save now.

Generali

DiggerUK wrote: »

As to the G20 making B3 mandatory.....when did they suddenly become the legislative body for all the sovereign states in the world.

Because that's how large organisations including Governments work: you send a representative to a meeting that you trust to make a decision on your behalf. The BIS is the body for Central Bankers and the place where they can make agreements that their Governments have told them to make. Do you honestly believe that Balls or Osbourne have the technical knowledge or time to negotiate this stuff? I hope not.

If as an organisation you can't cope with that then you end up with the CEO/Queen making every decision and you end up going bust/becoming North Korea.

DiggerUK

Generali wrote: »

Because that's how large organisations including Governments work:.........

Considering that a significant number of states have to be Sharia compliant in their banking arrangements, how exactly do such countries as the UAE and Pakistan fit in, when all of the new asset classes are interest bearing instruments.

They are guidelines, and pretty meaningless when you look at the small print......30 days liquidity?
They are an agreement to do nothing, and be prepared to do nothing.
..._

Thrugelmir

DiggerUK wrote: »

Considering that a significant number of states have to be Sharia compliant in their banking arrangements, how exactly do such countries as the UAE and Pakistan fit in, when all of the new asset classes are interest bearing instruments.

Do they have globally operating banks?

Those that do have operations in the UK. Will be required to comply within FSA regulations and UK statutory banking law. So they'll adjust to meet all requirements including Sharia.

Generali

DiggerUK wrote: »

Considering that a significant number of states have to be Sharia compliant in their banking arrangements, how exactly do such countries as the UAE and Pakistan fit in, when all of the new asset classes are interest bearing instruments.

They are guidelines, and pretty meaningless when you look at the small print......30 days liquidity?
They are an agreement to do nothing, and be prepared to do nothing.
..._

If you want to see the details they're on the BIS website including how Sharia compliant assets are covered.

I suspect that you're more interested in sniping away at how crap this all is than understanding it.

DiggerUK

Generali wrote: »

......I suspect that you're more interested in sniping away at how crap this all is than understanding it.

Sniping away at stuff on stilts is a hobby with a long pedigree.
I do have a good understanding of how much nonsense this all is, and is precisely the point I am making.

Even if Lehmans or Northern Rock had 300 days of liquidity, they would still have gone under, or needed bailing out. The toxic assets/liabilities are the genie in the bottle, not liquidity.
The public are going to be left with those liabilities, not those who are responsible.
..._

sabretoothtigger

Sharia compliant assets are covered.

Whats the chances of somewhere like Egypt switching to sharia banking or I guess since coptic Christians are there too, it'll always be a mix of both

I just wonder if debt based finance did turn out nasty might it all switch to some other fundamental basis

Even if Lehmans or Northern Rock had 300 days of liquidity, they would still have gone under, or needed bailing out. The toxic assets/liabilities are the genie in the bottle, not liquidity.

I believe Bradford and Bingley might have been ok. If I remember right they had a lower default rate then HSBC or other solid banks, it was slightly ironic. They did buy car loans and other nasties from usa but in the minority.

All banks failed to finance themselves long term to match their long term obligations. I still think this was the biggest mistake they made, but maybe its unavoidable.
However government is also guility of this especially USA. Apparently they've had a delibrate policy over a decade old now to reduce costs by borrowing short term, great till its not there

The public are going to be left with those liabilities, not those who are responsible.

I reckon in the end the biggest losers will be the bond holders. That would include holders of cash which is a zero coupon bond, so yea the public but on average UK is debtors not savers. So will we lose, I think mostly we dont have cash to lose.
Presuming we maintain our sovereignty and actual assets, we dont stand to lose exactly. Large amounts of land could be lost to foreigners though if money is cheap so is the debt and that backs the land.
So maybe we all become renters, thats why I argue to fix debt rates then the contract is cheap to service