Things That Make You Go Hmmm.... Such As Basel I...II...III... And Onward
Submitted by Tyler Durden on 11/20/2011 04:31 -0500
Central Banks
European Central Bank
Lehman
MF Global
Monetary Policy
From Grant Williams latest TTMYGH: "Basel III attempts to force encourage banks to hold larger percentages of government bonds on their balance sheets in order to shore up their capital bases and to provide a riskless safety net should they run into liquidity problems. Thus far, holdings of Italian debt - with its 20% risk-weighting - have bankrupted MF Global in the space of a week (no 30-day cushion there, then) while the ECB SMP program has spent billions of euros accumulating 20% risk-weighted assets rapidly-declining assets that everybody else wants to sell high-grade Italian (and, latterly, Spanish) government bonds in a desper- ate attempt to stop the very assets that banks have been pushed into holding from bringing down the whole edifice. The absurdity of the situation is striking. After 2008,
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Realist - Everybody in America is soft, and hates conflict. The cure for this, both in politics and social life, is the same -- hardihood. Give them raw truth.
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