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tonycordello

tonycordello
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  • The FDIC looks set to approve dual standards for bank leverage capital ratios of 5% for the holding companies and 6% for the banking units. The 3% minimum set by Basel "would not have appreciably mitigated the growth in leverage" prior to the financial crisis, says FDIC head Martin Gruenberg. The changes will apply to those deemed globally important: JPM, C, WFC, GS, BAC, MS, STT, BK. Set your calendars: The banks have until Jan. 1, 2018 to comply. [View news story]
    I guess regulators finally realized that the Basel II Risk Weighted Assets formula for the Tier 1 Capital Ratio is seriously flawed. The banks could set a targeted Capital Ratio and manipulate the risk weighting to reach that number.

    It took the regulators five years to realize those ratios were not an accurate metric for capital adequacy (and probably contributed to the financial crisis). Leverage may not be elegant but it does give an accurate picture of capital adequacy.
    Jul 9 12:56 PM | 1 Like Like |Link to Comment
  • The Bank of England and FDIC unveil the first cross-border plan to deal with too-big-to-fail banks that start...failing. Senior management would be sacked, shareholders would be wiped out, and unsecured bondholders "can expect that their claims would be written down to reflect any losses that shareholders cannot cover," which didn't happen in the financial-crisis bailouts. (PR[View news story]
    The national regulators will give up their supervision of the largest banks in their country to the ECB in Brussels. I don't think so.
    Dec 14 08:46 AM | Likes Like |Link to Comment
  • The Bank of England and FDIC unveil the first cross-border plan to deal with too-big-to-fail banks that start...failing. Senior management would be sacked, shareholders would be wiped out, and unsecured bondholders "can expect that their claims would be written down to reflect any losses that shareholders cannot cover," which didn't happen in the financial-crisis bailouts. (PR[View news story]
    Isn't the government getting paid back with interest?
    Dec 10 08:20 AM | Likes Like |Link to Comment
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