Dear,
Let me recommend you to read the speech “Basel III: Necessary, but not sufficient”, by the Secretary General of the Basel Committee on Banking Supervision, Mr. Wayne Byres.
http://www.bis.org/speeches/sp121106.pdf
There’re very interesting points in the speech.
- Capital and Liquidity requirements are going to be much higher for preventing future crisis.
- Regulations were insufficient to act as a constraint on the natural incentive within banks to increase leverage.
- We need to understand the demands of the environment we are presently living in.
- Shareholders will still want to avoid having excess capital sitting idle.
- Capital strength is a competitive advantage at a time of fragile markets and weak economic conditions.
- A robust set of international banking standards is critical for the future
We could argue why all these recommendations are valid today and not 10 years ago, but the key point is, as Mr. Byres points out “the demands of the environment”.
We’re in a systemic crisis and the environment has changed forever, debt levels and resources scarcity have become a huge limitation for growth.
http://www.telegraph.co.uk/finance/financialcrisis/9585027/IMF-Global-recovery-will-take-at-least-six-more-years.html
and
http://www.oecd.org/berlin/50405107.pdf
And Mr. Wayne Byres is describing how the Financial System will fulfill its function in the new economic model that will emerge from this systemic crisis.
Limited growth means limited Capital, and the logic answer for this Capital scarcity is increasing Capital Requirements. But with higher Capital requirements less Capital will be available for investing, driving the Financial System transformation from a business model based in volume to a business model based in efficient management of Capital and Liquidity. Again, Capital and Liquidity management are going to be the critical activity of the Financial System.
Efficient Capital and Liquidity management is at the foundation of the Integrated Financial and Risk Architecture of Bank Analyzer, and consequently the best answer for the requirements of the new Financial System that Mr. Byres is describing.
We’ll look at it with more detail in a future post.
Looking forward to read your opinions.
K. Regards.
Let me recommend you to read the speech “Basel III: Necessary, but not sufficient”, by the Secretary General of the Basel Committee on Banking Supervision, Mr. Wayne Byres.
http://www.bis.org/speeches/sp121106.pdf
There’re very interesting points in the speech.
- Capital and Liquidity requirements are going to be much higher for preventing future crisis.
- Regulations were insufficient to act as a constraint on the natural incentive within banks to increase leverage.
- We need to understand the demands of the environment we are presently living in.
- Shareholders will still want to avoid having excess capital sitting idle.
- Capital strength is a competitive advantage at a time of fragile markets and weak economic conditions.
- A robust set of international banking standards is critical for the future
We could argue why all these recommendations are valid today and not 10 years ago, but the key point is, as Mr. Byres points out “the demands of the environment”.
We’re in a systemic crisis and the environment has changed forever, debt levels and resources scarcity have become a huge limitation for growth.
http://www.telegraph.co.uk/finance/financialcrisis/9585027/IMF-Global-recovery-will-take-at-least-six-more-years.html
and
http://www.oecd.org/berlin/50405107.pdf
And Mr. Wayne Byres is describing how the Financial System will fulfill its function in the new economic model that will emerge from this systemic crisis.
Limited growth means limited Capital, and the logic answer for this Capital scarcity is increasing Capital Requirements. But with higher Capital requirements less Capital will be available for investing, driving the Financial System transformation from a business model based in volume to a business model based in efficient management of Capital and Liquidity. Again, Capital and Liquidity management are going to be the critical activity of the Financial System.
Efficient Capital and Liquidity management is at the foundation of the Integrated Financial and Risk Architecture of Bank Analyzer, and consequently the best answer for the requirements of the new Financial System that Mr. Byres is describing.
We’ll look at it with more detail in a future post.
Looking forward to read your opinions.
K. Regards.
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