Items Tagged with 'Exposure at default'


  • Beating Basel into American submission

    Federal Reserve Gov. Daniel Tarullo talked to a room full of lawyers Friday about implementing international bank regulation in America. And if that alone didn't confuse me enough, he dropped this Basel III bombshell: "I expect that we will, among other things, suggest recalibration of certain deposit run-off and commitment draw-down rates, as well as modification of the buffer definition to place a greater focus on the liquidity characteristics of assets, as opposed to such things as the credit ratings associated with the assets."
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  • Why Basel III is not enough

    Now that summer is over and I have recovered from the shock of Dodd-Frank, we have Basel III on the horizon. Basel III moves in some predictable directions, but -- focusing exclusively on capital – still falls short of meaningful reform that addresses the propensity for future crises.
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  • Get Ready for the Stress of Annual Bank Stress Tests

    Only seven banks out of nearly 100 failed the European stress tests around two weeks ago. Yet, the question still remains whether the test has done enough to ensure the strength of European financial institutions. The only real result of the entire exercise thus far seems to be that the watered-down stress tests in Europe have underscored a fundamental lack of confidence in the banking system across the proverbial pond. Indeed, investor jitters in the run up to the tests -- arguably created by the test itself -- are not subsiding.
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  • Tower of Basel

    Mortal that I am, I have been really confused about how US bank regulators -- notably the Federal Reserve, Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation -- coordinate when they make safety and soundness regulations for US banks.
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  • The New and Improved Cracks in the Bank Capital Framework

    Last week and the week before, the European parliament heard testimony from a number of expert sources on the proposals to revamp Basel 2, the set of banking policies created and maintained by the Switzerland-based Bank of International Settlements (BIS). The set of reforms still under consideration are currently using the working title "Basel 3" -- and like it or not, this change is coming, and coming in ways that will almost certainly effect the global economy, the big banks, and your bottom line.
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