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RBNZ sees tighter capital adequacy standards for banks in coming years
November 11th, 2009The Reserve Bank has signaled to banks it expects tighter rules on capital adequacy in coming years as it watches moves afoot overseas to force banks to put aside more capital to cope with future recessions and bad debts.
“We also expect that international policy reforms through the Basel Committee will see a tightening of bank capital adequacy standards over the next year or two,” Deputy Governor Grant Spencer said.
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November 11th, 2009 at 9:20 am
London’s burning
http://www.telegraph.co.uk/finance/economics/6539671/UK-more-at-risk-than-other-major-economies-of-losing-top-credit-rating.html
And our reserve banks target inflation rate has lead to a %42 increase in groceries in 10 years right on target compounding is a beautiful thing. On top of this Ive just sent lambs to SFF and now they owe me 100k not so beautiful, fingers crossed.
Who’s going to go bust first
http://www.prudentbear.com/index.php/thebearslairview?art_id=10307
November 11th, 2009 at 10:12 am
AndrewJ – great link to the UK Telegraph. Whilst there I had a nosey around some of the other articles in the Finance section. Wow, things are ugly in the UK. The articles themselves are ugly enough, but the readers’ comments afterwards are even worse. There appears to be liittle to no optimism there.
November 11th, 2009 at 10:20 am
“…. as it watches moves afoot overseas…”
What’s that sound?
That’s right, nothing – the sound of indecision in the face of the obvious.
November 11th, 2009 at 12:44 pm
“Meanwhile, the Bank confirmed a start date of April 1, 2010, for the new prudential liquidity policy that should reduce banks’ over-reliance in the past on short term wholesale funding. The policy was to have come in before the end of this year.
Banks would initially be required to hold minimum core funding ratio set initially at 65 percent, moving in two stages to as high as 75 percent on a timetable yet to be determined, but which should be complete by mid-2012, the RBNZ says”
So the banks must have told Alan..”.hold on mate, we aint starting no prudential stuff until April at the earliest” and guess what….the start date has move out. What’s the bet the 65% and 75% targets will be chopped down and also placed on the never never list. One massive fat joke.
November 11th, 2009 at 2:22 pm
As if the banks don’t have a clue how to fund themselves? Or perhaps this is the ‘intrusive regulatory oversight’ Rod Carr warned about in 2001 (see http://www.rbnz.govt.nz/research/bulletin/1997_2001/2001jun64_2Carr27jun.pdf page 57).
Really the RBNZ should stop working on more intrusive regulatory oversight and re-start working on making bank failure a quick haircut for creditors rather than something to be avoided with taxpayer backstop in case of need.
November 11th, 2009 at 9:10 pm
What are they going to lift, before the days of electronic credit and the electronic transfer system runs on the bank were when people rushed to convert what was recorded as money into what was recognised as physical money, i.e. receipt deposits for gold, on call deposit accounts for cash. I ask just what you are going to rush to the bank to convert whats on your bank statement into, it cant be cash, because unless you are very quick to get the 3% of our money supply that anylonger exists in notes and coin you will miss out. Thus can someone of higher intelligence please tell me just what it is they are going to increase when they say lifting capital adequacy requirements, I tell you what I think it means, they are going to tell those that plundered the system not to lone excessive created credit forward in comparision to the available natural resources who’s future utilisation is the only thing that currently backs the monetary system, and like those who have committed the previous great crimes against wider humanity, it looks like they are going to get to keep the booty and their dictatorship by economic domination.