bank capital

  • It's Comptroller of the Currency Thomas J. Curry!


    New Capital Regulations No Big Deal, Say Regulators

    US banking regulators have released new proposals to require banks to have higher leverage ratios, counterintuitively meaning lower leverage, and you can go read them here, or read about them here or here. Briefly: in addition to regular Basel III risk-based capital requirements, banks are also subject to a backstop equity-divided-by-assets0 leverage test, and internationally […]

    / Jul 9, 2013 at 1:49 PM
  • This assumes for no particular reason that everyone should have a 10% capital ratio, and then looks at percentage point changes from that ratio if you normalized the risk weighting.


    Some Banks Think Some Borrowers Are Riskier Than Other Banks Think They Are

    It’s become fashionable to make fun of the Basel risk-based capital rules for being overly complicated and subject to gamesmanship. “Why should we risk-weight assets at all?” people ask, for some reason. “Just look at simple leverage and assume that all assets are equally risky!” Sure okay. The problems with treating all risks the same […]

    / Jul 8, 2013 at 5:38 PM
  • Basel, where these things notionally come from.


    Relatively Simple Basel Leverage Rules Still Pretty Complicated

    If you think bank regulation should be made much simpler it’s probably worth reading today’s Basel Committee document on bank leverage ratios, which the chairman of the Basel Committe described as “a relatively simple measure.” And what could be simpler than regulating leverage ratios?1 It’s just, like: tot up all your assets, including all your […]

    / Jun 26, 2013 at 5:03 PM
  • soothing soothing blue


    Here’s Another Plan For Not Bailing Out Too Big To Fail Banks

    Some analysts at the Bank for International Settlements have found a new way to unwind too-big-to-fail banks painlessly, which I guess is newsworthy; here is a good summary, and here is the actual paper. The basic idea is to resolve a bank over the weekend by writing down its debt by some regulator-chosen amount X, […]

    / Jun 6, 2013 at 5:53 PM
  • Gonna be honest: it's been a bleak day for relevant pictures. Sorry.


    Banks Doing Too Much, Too Little Lending

    One lazy but fun thing to do as a financial blogger is to find two publications saying the opposite thing on the same day, and then be all “haha, dopes.” Business Loans Flood the Market, the Journal informed us this morning, while Bloomberg tells us that by another measure loans are at a five-year low, […]

    / Feb 20, 2013 at 4:37 PM
  • Banks, News

    JPMorgan Has A Lot Of Great Things Going On This Quarter Other Than, Y’Know

    When the London Whale thing came out, JPMorgan made one sort of clever attempt to minimize it by saying this: Since March 31, 2012, CIO has had significant mark-to-market losses in its synthetic credit portfolio, and this portfolio has proven to be riskier, more volatile and less effective as an economic hedge than the Firm […]

    / May 29, 2012 at 5:55 PM
  • Banks, News

    David Viniar’s Anti-Regulator Message On The Goldman Sachs Earnings Call Is Much Subtler Than That Of Some People He Could Name

    Like I mentioned earlier, the David Viniar show this morning is a good time in its (relatively) quiet way. If, like me, you’ve drunk the GS we-understand-risk Kool-Aid, you’ll particularly enjoy Viniar’s take on capital requirements, which is – and I say this as a compliment – pretty cynical. Now, one thing that you might […]

    / Jan 18, 2012 at 5:10 PM
  • News

    Maybe Banks Should Be Rewarded For Making More Bad Loans?

    Ooh look a chart: That’s from this quite punchy paper by Patrick Slovik of the economics department at the OECD. It shows you that, in 1992, big banks had risk-weighted assets, which determine how much capital they’re required to have, of over 65% of their total assets, which measures how much lending and investing and […]

    / Dec 14, 2011 at 3:26 PM

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