No more QT, the FIAT banks fucked that one up. Back to square one... with a much bigger problem:
Combined bank losses of 77 - 91% of their combined capital cushion
- Thread starter Maverick2608
- Start date
Quite the opposite. Fed should continue the QT to do whatever is needed to bring down inflation unless people are willing to get off their a$$es and start working ((until the robots are able to take over) and/or start bartering and just put the money in the bank to earn interest. No point starting all over just because some small regional bank with undiversified business lines couldn't adjust to the high-interest rate fast enough. The banking industry overall is making higher profits actually with QT.
Some more news regarding Basel III.
US banks face $35 billion hit from 'Basel Endgame', says Oliver Wyman
https://www.msn.com/en-ca/money/top...m-basel-endgame-says-oliver-wyman/ar-BB1ijvNe
LONDON (Reuters) - U.S. banks could lose up to $35 billion in revenues in 2025 under current proposals for new capital rules that could "relevel the playing field" for European lenders, a study showed on Thursday.
The 'Basel III Endgame' standards, the final leg of international bank capital rules that followed the global financial crisis, could impact U.S. banks disproportionately, according to consultancy firm Oliver Wyman.
Each country decides how it will apply the globally agreed Basel rules, leading to some differences in practice, and current proposed U.S. rules are more punitive than European proposals in how market, credit, and operational risk capital are calculated, it added.
European lenders could gain about half the revenue lost by their U.S. peers from next year, with non-bank financial firms such as private credit funds and non-bank liquidity providers winning the rest, the study said, adding that European wholesale banking revenue totalled $195 billion in 2023.
The Federal Reserve is considering possible adjustments to the rules, due to be introduced mid-2025, after U.S. banks warned that they risked causing lenders to curtail lending.
While Oliver Wyman expects changes to the current rules, it said that in the current form Basel III "could largely close the return gap between US and European banks, relevelling the playing field for Europeans."
"It presents an interesting change in direction and an opportunity for European banks," partner Ronan O'Kelly told Reuters.
European banks have lost market share to more profitable U.S. banks since the 2008-09 financial crisis, with investment banking league tables dominated by the Wall Street giants.
European lenders Deutsche Bank, HSBC, Barclays, BNP Paribas, Societe Generale and UBS have seen their share of capital markets business shrink to 35% in 2022 from 41% in 2012, against U.S. firms JP Morgan, Citi, Goldman Sachs and Bank of America, Oliver Wyman found.
But Europeans' share could rise 10 percentage points after Basel III rules are adopted, it said.
Morgan Stanley, which contributed to the research, was excluded from the numbers.
Basel III rules agreed include stricter capital, leverage and liquidity requirements for big banks and aim to boost financial stability.
The current U.S. rules are likely to result in a 35% increase in so-called risk-weighted assets (RWA) for U.S. banks globally and international banks' U.S. subsidiaries, compared with 15% for European banks, Oliver Wyman said.
Risk-weighted assets measure how much capital banks need to hold against the risks they are taking.
US banks face $35 billion hit from 'Basel Endgame', says Oliver Wyman
https://www.msn.com/en-ca/money/top...m-basel-endgame-says-oliver-wyman/ar-BB1ijvNe
LONDON (Reuters) - U.S. banks could lose up to $35 billion in revenues in 2025 under current proposals for new capital rules that could "relevel the playing field" for European lenders, a study showed on Thursday.
The 'Basel III Endgame' standards, the final leg of international bank capital rules that followed the global financial crisis, could impact U.S. banks disproportionately, according to consultancy firm Oliver Wyman.
Each country decides how it will apply the globally agreed Basel rules, leading to some differences in practice, and current proposed U.S. rules are more punitive than European proposals in how market, credit, and operational risk capital are calculated, it added.
European lenders could gain about half the revenue lost by their U.S. peers from next year, with non-bank financial firms such as private credit funds and non-bank liquidity providers winning the rest, the study said, adding that European wholesale banking revenue totalled $195 billion in 2023.
The Federal Reserve is considering possible adjustments to the rules, due to be introduced mid-2025, after U.S. banks warned that they risked causing lenders to curtail lending.
While Oliver Wyman expects changes to the current rules, it said that in the current form Basel III "could largely close the return gap between US and European banks, relevelling the playing field for Europeans."
"It presents an interesting change in direction and an opportunity for European banks," partner Ronan O'Kelly told Reuters.
European banks have lost market share to more profitable U.S. banks since the 2008-09 financial crisis, with investment banking league tables dominated by the Wall Street giants.
European lenders Deutsche Bank, HSBC, Barclays, BNP Paribas, Societe Generale and UBS have seen their share of capital markets business shrink to 35% in 2022 from 41% in 2012, against U.S. firms JP Morgan, Citi, Goldman Sachs and Bank of America, Oliver Wyman found.
But Europeans' share could rise 10 percentage points after Basel III rules are adopted, it said.
Morgan Stanley, which contributed to the research, was excluded from the numbers.
Basel III rules agreed include stricter capital, leverage and liquidity requirements for big banks and aim to boost financial stability.
The current U.S. rules are likely to result in a 35% increase in so-called risk-weighted assets (RWA) for U.S. banks globally and international banks' U.S. subsidiaries, compared with 15% for European banks, Oliver Wyman said.
Risk-weighted assets measure how much capital banks need to hold against the risks they are taking.
As of March 2020, the Fed has no reserve requirement for depository institutions! But see: https://www.federalreserve.gov/monetarypolicy/files/reserve-maintenance-manual.pdf
Note also: "The annual indexation of the reserve requirement exemption amount and low reserve tranche, though required by statute, will not affect depository institutions' reserve requirements, which will remain zero."
Previously, the Fed controlled the funds rate indirectly by controlling Aggregate reserve balance.
This was greatly simplified under the Powell Fed to use a mechanism similar to what other Central Banks use , e.g., Canada, Australia, etc. This simplified mechanism makes use of interest paid on reserves to set a lower bound for the Funds rate and the discount window rate to set the upper bound.
It might be a good idea to enforce the Sherman and Clayton Antitrust laws. Nothing gets price inflation juices flowing better than good old fashioned monopolies on essential goods and services!
https://www.ftc.gov/legal-library/browse/cases-proceedings
"Competition is a sin!" -- J. D. Rockefeller
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There seems to be some confusion. There is never a big problem; maybe a little temporary problem if one or a few depositors represent the bulk of a banks deposits, and those depositors all want their money at the same time. Nevertheless any bank that is solvent can handle even this situation. When banks' liabilities exceed their assets, however, these specific banks, and their equity holders, have a problem. This problem does not extend to depositors who will be made whole regardless of whether their bank is solvent! You will never lose so much as a penny in any U.S. Bank, regardless of whether it is solvent or not!, so long as your deposit balance does not exceed the FDIC limit --- even that didn't matter in the GFC, all depositors were made whole even though their banks underwent resolution. Your money deposited in U.S. Banks is absolutely safe.
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