The Great Debate UK
from Felix Salmon:
The good and the bad of Basel III
It's looking as though the FT was, thankfully, a little over-hasty when it led today with a big story saying that the banks have won the Basel battle over liquidity requirements. A BIS spokesman (the BIS is the organization hosting the Basel III negotiations) says that weakening liquidity requirements hasn't even been discussed, let alone agreed to. Yes, it's likely that the banks will win some concessions at some point, but there's a long way to go before then.
Joel Clark is hearing similar messages:
Senior committee members have told Risk they were shocked to see reports suggesting the proposal for a net stable funding ratio (NSFR) would be shelved, as they don't intend to make any firm plans until the next Basel Committee meeting on July 15 at the earliest...
"Leading up to the July meeting, there are a lot of efforts to see if we have an agreement among committee members on the direction forward, but we haven't got there yet. The committee has not agreed to the elimination of any parts of the proposal, I can say that definitively," says one US-based regulator and committee member.
Meanwhile, another potentially enormous problem is lurking in the background: the crucial yet brain-numbing issue of accounting standards. Citigroup's Bill Rhodes tells Global Risk Regulator's David Keefe that the distance between the U.S. and Europe is widening, and that it could end up being a "deal-breaker":
