Category Archives: Capital requirements

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Report: Financial institutions need a lot more capital

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Three economists from the Bank of England have concluded financial institutions need much more capital than they’ve had in the recent past or than Basel III proposes. David Miles, Jing Yang and Gilberto Marcheggiano say banks need to raise more … Continue reading

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Regulators delay rules to stop shadow bank runs

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Basel regulators said in a December 2010 report they will not soon adopt measures to deal with bank runs, like the repo run in 2007 and 2008 that triggered the financial crisis. Instead, they will phase in the measures and … Continue reading

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NYU: Most of the leverage was in repos

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“Repo financing was the basis of most of the leveraged positions of the shadow banks.” From RepoWatch’s view, that’s the key sentence in “Regulating Wall Street,” a November 2010 book authored by New York University Stern School of Business professors Viral … Continue reading

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Banks need more equity and less debt

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The chorus of critics who say the new Basel III capital requirements are not going to be nearly strong enough to protect financial markets from another crisis just got a lot louder. Twenty university professors headed by Anat Admati, professor … Continue reading

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“Fallacies, irrelevant facts, and myths” in banking

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Four economists  from Stanford University and the University of Bonn have published a study essentially claiming that banks are full of it when they complain that it’s too expensive for them to raise money mainly by selling stock, like most companies … Continue reading

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Capital regulations said to fuel 2007-08 crisis

German economist Martin Hellwig says faulty capital regulations played a key role in the financial crisis of 2007-08 and recent proposals to improve them, by international banking regulators in Basel, Switzerland, fall far short of the reform needed. He recommends … Continue reading

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Little progress on rules to help banks survive a panic

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Regulators are not yet setting rules on how much ready cash or cash-like assets a bank has to have, which seems strange since the financial crisis of 2007-2008 featured banks that became insolvent because their securities were losing value and … Continue reading

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“Risk-free” repos weren’t risk free in 2008

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Regulators tend to try to clamp down on what they think are risky assets, risky financing, risky deals. But in the financial crisis of 2007-2008, it was the “safe” elements that caused the trouble, say New York University professor Viral … Continue reading

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Banks weakened by gaming their capital requirements

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Securitized banking, which is economist Gary Gorton’s term for securitization financed by repos, has been around a long time. Why did it balloon and then collapse between 2001 and 2008? In the seven steps that RepoWatch has identified as the answer … Continue reading