Capital Requirements for Banks Hotly Debated Ben Chu writes: A senior official at the Bank of England has been accused of misleading the public about the safety of UK banks. Alex Brazier, the Bank’s executive director of financial stability, rejected calls … Continue reading →
Adam Creighton writes: Some of the world’s leading economists are hosing down fears that the US – and by extension the west – is about to lose its economic hegemony. In the coming few years, even a decade, no. — … Continue reading →
Matt Levine writes: Ever since about mid 2008, when everyone had a massive panic about bank capital, there has been a community of people who wanted to ignore the Basel Committee on Banking Supervision, and their “Tier One Ratio” (based … Continue reading →
David Shilpley writes: The European Central Bank has just published the results of new “stress tests” on European Union banks, hoping to convince financial markets that the banking system is now strong enough to weather another crisis. This latest exercise … Continue reading →
Anat Admati and Martin Hellwig, whose seminal book “The Banker’s New Clothes” outlines with clarity why the banks prefer using debt to using equity, make the case for using equity ratios as the criterion for solidity, not the Basel asset … Continue reading →
Anat Admati in “The Bankers’ New Clothes: co-authored with Martin Hellwig argues that we need to make banks strong again. Bankers like Jamie Dimon have a vested interest in keeping banking just the way it is, which is the way … Continue reading →
New rules do not go into effect until 2018. The real question is, is this the answer for banks that are too big too fail. They are still too big. Some economists think that capital requirements mask the real problem. … Continue reading →
The stress tests proposed are based on capital ratios. Distinguished economists like Anat Admati and Martin Helwig argue that we are looking in the wrong place to test stress. Admati and Helwig argue that if banks had much more equity … Continue reading →
Here comes a book which argues, quite to the contrary of conventional wisdom that we need even bigger banks. IF ANY good has come out of the financial crisis that reached its peak in late 2008 it has been a … Continue reading →
The Bankers’ New Clothes by Anat Admati and Martin Hellwig Princeton University Press The authors’ credentials are impeccable and even intimidating. But their message is clear and accessible. Discussing the Basel III ratio, which outlines a bank’s capital requirements, they … Continue reading →