Felix Salmon

Basel III arrives

September 12, 2010

Basel III has arrived! The official BIS press release is here, with a wealth of information inside it. But they conveniently also supply this table, which gets to the core of the matter:

Why Basel III won’t hurt banks or the economy

September 10, 2010

The new Basel III capital ratios are going to be announced this weekend, and the banks are going to complain about how much the new ratios are going to raise lending costs and hurt economic growth. The BIS, of course, has taken these complaints seriously, and has released two monster reports calculating exactly what the impact of higher capital standards will be.

More reassuring news on Basel III

September 9, 2010

Robert Peston provides the latest piece of the Basel III puzzle, adding to last night’s report from Australia: while the Tier 1 capital ratio looks set to be 8%, the core Tier 1 capital ratio — the bit which is hardest to game, and which is basically just pure equity — seems to be 7%. That number seems to be made up of a base minimum of 4%, plus a 3% conservation buffer.

Basel III: The compromise

September 9, 2010

Maybe 9% was too good to be true after all. According to David Walker, of Australia’s Banking Day, a compromise with “nations including Germany, France, Italy and Japan” has knocked 0.5% off the proposed Tier 1 capital requirements, and another 0.5% off the proposed conservation buffer. As a result, banks wanting to pay dividends are now going to have to have a minimum of 8% Tier 1 capital, rather than 9%.

Why regulators should be tough on bank capital

September 7, 2010

John Carney today writes about what he calls “the deeper problem” behind the Basel III negotiations: “how regulators can assess capital requirements without a functioning market process”.

Will Basel III really deliver?

September 7, 2010

I very much hope that Die Zeit is right about the Basel III capital requirements: the numbers being mooted there are definitely at the top end of what anybody expected.

Basel III: The incomplete capital buffer proposal

July 16, 2010

The Basel Committee has started producing pretty detailed documents: today it released what it calls a “a fully fleshed out countercyclical capital buffer proposal“.

Congress approves Basel III before it even exists

July 15, 2010

Assistant Treasury secretary Mike Barr celebrated the passage of the financial reform bill today by phoning me up for a chat. So of course I asked him how much has really been achieved, and how much the really important stuff has been left to the Basel III negotiation process.

Reporting and lobbying in Basel III

July 15, 2010

The WSJ has its own Basel III update today, which recapitulates most of what we learned yesterday. But there’s one new twist — or new emphasis on an old twist, I’m not sure which. When it comes to proposed liquidity requirements, says the accompanying graphic, “the proposal could cause huge funding shortfalls for banks world-wide.” And the article elaborates: