Global regulators are united in the belief that banks need more capital. The crisis of the past five years or so, regulators testify, requires more capital. Former FDIC Chairman Sheila Bair, upon hearing my heretical ideas on the US rejecting Basel III entirely, asked me whether I supported her and US regulators in seeking more capital in general.
It’s beyond ironic — closer to moronic, really — that Jamie Dimon would give an interview to London’s very own Financial Times, complaining that international bank-regulation standards are “anti-American,” on the very day that the Vickers Report — Robert Peston calls it “the most radical reform of British banks in a generation, and possibly ever” — is released.
Last week I described what the prospective default by the US does to the bond markets in terms of spread relationships with supposed “risk free” rate of return represented by government bonds in a research note, “Black Friday and the end of risk free returns”:
This week I lovingly disparaged those members of the media who spent much time covering the new and improved bank regulatory scheme known as “Basel III.” As someone who was quizzed by my father about the original 1988 Basel accord, I don’t give a toasted sausage about Basel III and said so recently: