There can be few in the 99% who can take cheer from this news, in the FT this morning:
International banks received a new year fillip when regulators announced that the first ever global liquidity standards would be less onerous than expected and not be fully enforced until 2019, four years later than expected.
Now I know Basel III will never be the right solution for banking.
And I know some will argue that this change will allow for more lending in the short term.
But neither is the point. The point is that the status quo has been supported and that the bankers have firstly, yet again, secured their position, and secondly have ensured change is delayed until eleven years after the crash.
Both are absurd positions to have reached. We needed real reform, which should focus on breaking up the banks, and we need it now. And, as has been said by people more experienced of banking than me by a long way, we need simpler and more obvious rules on liquidity risk based upon their gearing right now.
And we're not getting them. In which case it's time to sit back and wait for the next banking failure.
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Since the next failure is likely to be of catastrophic proportions, readers might now see the sense in preparing for major societal problems, including the complete breakdown of food delivery. Google for UK preppers to read advice from people who saw this coming years ago and have prepared accordingly.
Whilst I (just about) understand the argument that this will allow the banks to lend more, wouldn’t it be better to enforce the changes now and then give relief to banks that lend, rather than put off the changes for another six years in the hope that banks may lend more? Reward for something actually done rather than simply a hope. Also “Banks will be able to count a much wider variety of liquid assets towards their buffers, including some equities and high-quality mortgage-backed securities”. Presumably these are completely different liquid high-quality mortgage-backed securities from the ones the banks held in 2007/8 which were liquid and highly rated until suddenly they weren’t (at the exact moment the banks needed them to be liquid).
As I understand it, they’re essentially the same ones. Prepping yet?