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The Implementation of Basel II: Some Issues for Cross-Border Banking
It was a difficult decision for the Basel Supervisors' Committee to delay by one year, to 2008, the start date for implementation of the advanced approach while retaining the 2007 target for the other approaches. The delay reflected the realities that many banks that will be applying the advanced approach needed more time and that the requirements in the United States for public comment and review made it impossible for final U.S. rules to be promulgated before 2006. Thus, the earlier start for the other approaches, along with the imposition of the 95 percent of Basel I capital floor for that first year, 2007, seemed to all concerned to be a reasonable compromise, more practical than trying to hold to the original schedule for all banks or delaying the start date for approaches not permitted in the United States.
Under the circumstances, consistent with our agreement to have a single, worldwide start date for the advanced approach, the U.S. authorities do not see any opportunity for implementation of the advanced approach in the United States before 2008, regardless of any individual bank's ability and readiness to do so.
Originally posted by mrsdudara
OK, This was the first I had ever heard of a Bassel anything. So I looked it up and saw things like the Federal Reserve is not Basel III ready and what that means. I dont exactly understand what that means and if they were actually serious. Is the world really saying that we have to go back to currency that states that it is gold backed or else that currency is no longer worth anything?
Originally posted by stander
It's not easy to keep up with all the jargons and acronyms to the words that no one can even pronounce -- words coined to disguise the real meaning of mostly dubious activities of the financial word:
The drive for Dow 10,000 hit a bump on the road Monday as investors took a breather, sending stocks down more than half a percent at the opening bell.
What's wrong with the word "money"?
For how long will that "breather" last?
It all depends on the "investors" when they decide on buybacks. They usually make these decisions before going to lunch according to recent EAS data.
(EAS = "Etch A Sketch" --> DJIA = "Dow Jones Industrial Average")
Originally posted by HimWhoHathAnEar
The Option-ARM and Alt-A reset waves have already begun, which will make subprime look like a picnic. Then there's Basel III compliance:
September 30th is the date all banks worldwide must become Basel II and Basel III compliant. Those who do not will not be allowed to trade outside of their borders with any bank, nor within their borders with a Basel II or III bank. US banks have massive derivative exposure “off balance sheet”, thus they won’t qualify under Basel III. If pursued the world will find out that the US banking system is bankrupt. The world knows the Fed is the lender of last resort and its problems are beyond repair, so is it any wonder gold has broken out to new highs. This is a monumental event and if it has to be adhered too all hell will brake loose in October.
I hear the fat lady tuning her voice in the background.
Oh, you mean the gatherings are affecting the market like the moon affects the tide in the oceans?
Vicis Capital Suspends Redemptions After Hedge Fund Loses 12%
Sept. 21 (Bloomberg) -- Vicis Capital LLC, the $2.9 billion hedge fund started by former Lehman Brothers Holdings Inc. trader John Succo in 2004, barred clients from withdrawing money from its main fund after losses this year.
The firm received “higher-than-anticipated” requests for a Sept. 30 distribution from its Vicis Capital Fund, according to a letter sent to clients today and obtained by Bloomberg News. The New York-based hedge fund will resume withdrawals if clients approve a plan to separate hard-to-sell assets into another pool, the letter said.
Vicis clients sought to withdraw $550 million at the end of September, after $2.7 billion was returned to them since October, according to a person familiar with the firm. Hedge funds including New York-based Fortress Investment Group LLC and Harbinger Capital Partners last year limited investor withdrawals to avoid raising cash by selling off holdings at distressed prices.
Fed Rejects Geithner Request for Study of Governance, Structure
“It is not obvious at all why that is a Treasury responsibility or even appropriate why the Treasury would undertake that kind of study,” said Robert Eisenbeis, chief monetary economist at Cumberland Advisors Inc. in Vineland, New Jersey, and a former Atlanta Fed research director. “The Fed was created by Congress and it is not part of the executive branch.”
For many years the BIS kept a very low profile, operating behind the scenes in an abandoned hotel. It was here that decisions were reached to devalue or defend currencies, fix the price of gold, regulate offshore banking, and raise or lower short-term interest rates. In 1977, however, the BIS gave up its anonymity in exchange for more efficient headquarters. The new building has been described as “an eighteen story-high circular skyscraper that rises above the medieval city like some misplaced nuclear reactor.” It quickly became known as the “Tower of Basel.” Today the BIS has governmental immunity, pays no taxes, and has its own private police force.4 It is, as Mayer Rothschild envisioned, above the law.
It was evidently not in the game plan, however, that U.S. banks should escape the regulatory net indefinitely. Complaints about the loopholes in Basel I prompted a new set of rules called Basel II, which based capital requirements for market risk on a “Value-at-Risk” accounting standard. The new rules were established in 2004, but they were not levied on U.S. banks until November 2007, the month after the Dow passed 14,000 to reach its all-time high. On November 1, 2007, the Office of the Controller of the Currency “approved a final rule implementing advanced approaches of the Basel II Capital Accord.”8 And on November 15, 2007, the Financial Accounting Standards Board or FASB, a private organization that sets U.S. accounting rules for the private sector, adopted FAS 157, the rule called “mark-to-market accounting.”9 The effect on U.S. banks was similar to that of Basel I on Japanese banks: they have been struggling to survive ever since.
The notional value of derivatives held by U.S. commercial banks increased $24.5 trillion in the fourth quarter, or 14%, to $200.4 trillion, due to the migration of investment bank derivatives business into the commercial banking system.
Originally posted by HimWhoHathAnEar
I don't find it that difficult to understand. The fact that the effects of Basel I & II are well understood and the timing is obvious makes for a historical reference. Implementation of any further 'pillar' on Sept 30 or any other time for that matter will open a whole new chapter in bank insolvency. If derivatives are forced onto the banks books, it's over.
"global government," a term that lacks a basic description, to begin with.
Can you be more descriptive?
LANDMARK DECISION PROMISES MASSIVE RELIEF FOR HOMEOWNERS AND TROUBLE FOR BANKS
A landmark ruling in a recent Kansas Supreme Court case may have given millions of distressed homeowners the legal wedge they need to avoid foreclosure.
In Landmark National Bank v. Kesler, 2009 Kan. LEXIS 834, the Kansas Supreme Court held that a nominee company called MERS has no right or standing to bring an action for foreclosure.
MERS is an acronym for Mortgage Electronic Registration Systems, a private company that registers mortgages electronically and tracks changes in ownership.
The significance of the holding is that if MERS has no standing to foreclose, then nobody has standing to foreclose – on 60 million mortgages.
That is the number of American mortgages currently reported to be held by MERS. Over half of all new U.S. residential mortgage loans are registered with MERS and recorded in its name.
Holdings of the Kansas Supreme Court are not binding on the rest of the country, but they are dicta of which other courts take note; and the reasoning behind the decision is sound.