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Some will call it a back down, some a bow to reality, but the Basel committee approves a far...

Some will call it a back down, some a bow to reality, but the Basel committee approves a far easier liquidity rule for banks than had been proposed 2 years ago. Lenders will be allowed a wider range of assets that qualify as capital buffers, a lower assumed rate of fund outflows in a crisis, and be given until 2019 (rather than 2015) to implement the new regime.
Comments (15)
  • Macro Investor
    , contributor
    Comments (9032) | Send Message
    Heh, heh, heh. Now watch the speculation explode!
    6 Jan 2013, 10:20 PM Reply Like
  • bluefin646
    , contributor
    Comments (71) | Send Message
    No wonder why the xlf 'broke out' last week! This could get very interesting to the upside this week! Tremendous global teamwork as Global Fed Banks understand that banks will need some extra wiggle room as they tighten up some of the spreads, ie no more free money, or let's just start with less free money first. Smooth move by all! Hello 1500 spx!
    6 Jan 2013, 10:30 PM Reply Like
  • Herr Hansa
    , contributor
    Comments (3080) | Send Message
    This should be very positive for Credit Suisse (CS) and UBS AG (UBS), since the Swiss National Bank has been pushing them to be Basel III compliant sooner, and urging an even higher Tier 1 capital ratio. Of the other international banks that are far from compliance, I would expect deleveraging to continue throughout 2018 and into 2019. It's a bad change in the timeline in that banks will take longer to get to "safer" levels. While this may be good for 2013 asset moves, or perhaps riskier sovereign bond purchases, I don't see the effect lasting through 2018.
    6 Jan 2013, 10:35 PM Reply Like
  • steven russo
    , contributor
    Comments (173) | Send Message
    6 Jan 2013, 10:43 PM Reply Like
  • tradewin
    , contributor
    Comments (658) | Send Message
    It's the same old story. Fannie, Freddie and their too big to fail buddies got bills watered down, giving them just enough time to figure out how to position themselves around the newly passed legislation. That Basel committee is nothing more than a group of privateers steering inert enitities like the Fed into making policy that they will have to apologize for in the future.
    6 Jan 2013, 10:56 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9032) | Send Message
    6 Jan 2013, 10:57 PM Reply Like
  • Seth Walters
    , contributor
    Comments (675) | Send Message
    This could simply be a nod to the fact that the Fed is going to start drying up the liquidity soon as the QE begins to wind down and eventually moves to tightening.


    The objective could be from preventing the banks from having another liquidity crisis that they couldn't practically be rescued from in an environment of austerity. I think it would be extremely unwise to assume that this means things are suddenly great. I view it as a warning sign.
    6 Jan 2013, 11:02 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9032) | Send Message
    Seth, If the Basel III rules were much stricter, then would you say that it would be a good thing and the market will rally? I am just trying t figure out if you are a perma bear, and nothing is good for the market for you.
    6 Jan 2013, 11:04 PM Reply Like
  • Seth Walters
    , contributor
    Comments (675) | Send Message
    I'm not a perma bear, but the developed economies are driven by consumer income, productivity, and innovation. Not by increasing available paper capital into an overly debt-saturated world. Failure of capital controls was what caused the bubble and the crash.


    I would consider many things bullish steps for the long term. There is not much I see that can make the markets bullish in the short term, as way too big a chunk of the economy is built on perpetual deficit spending.
    7 Jan 2013, 12:02 AM Reply Like
  • marketwatcher23
    , contributor
    Comments (935) | Send Message
    Seth the only thing that matters is the market. If WW3 erupts and 7 billion people die and the market goes up that is bullish. If the market were to drop because certain factors needed to take place to right the system and you were okay with that, that makes you a perma bear.
    7 Jan 2013, 07:29 AM Reply Like
  • Petrarch
    , contributor
    Comments (714) | Send Message
    Good news
    6 Jan 2013, 11:19 PM Reply Like
  • 1980XLS-2.0
    , contributor
    Comments (525) | Send Message
    Elections are over.


    Rhetoric was just that.


    47% just got their paychecks reduced. by 2%.


    Party on!


    Let the sheeple assume the risk.
    7 Jan 2013, 01:29 AM Reply Like
  • chad2
    , contributor
    Comments (232) | Send Message
    Can anyone tell me how much corporate welfare is included in this $10B settlement? It seems like that the numbers were so staggering that a mere $10B is petty cash.
    I guess my final question is this: When does the public finally end paying the tab for this debacle?
    Chad in CO
    7 Jan 2013, 10:13 AM Reply Like
  • dreadlordnaf
    , contributor
    Comments (481) | Send Message
    If I am not mistaken, unless they changed it last minute the "wider range of assets " they are referring to includes bumping up gold's status in regards to how much of it banks can use as a capital buffers.


    This bodes well for gold's future if the big banks are now coming on board.
    7 Jan 2013, 01:45 PM Reply Like
  • Herr Hansa
    , contributor
    Comments (3080) | Send Message
    That process already began in December. The bigger change now, and in the near future, is a revaluation and acceptance of lower rated bonds. Part of that process began months ago when Greek bonds were once again accepted as collateral, though with a huge haircut. It appears that part of the process is designed to lower the yields on peripheral country bonds in Europe. This could slightly lessen the demand for US Treasuries. We should be able to see the effects over the next several weeks.
    7 Jan 2013, 02:47 PM Reply Like
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