Basel III Summary, And The Fed's Endorsement of 20x+ Leverage

Tyler Durden's picture

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AUD's picture

It will be funny when the core Tier 1 capital is actually revealed to be junk.

Is there a full list of such 'safe' assets available?

Nihilarian's picture

Yeah, that list exists on a cocktail napkin at one of FASB's ARSE (Accounting Rules Suspension Engagement) parties.

MarketTruth's picture

The Fed wants ZERO reserves!?!!?!

"Given the very high level of reserve balances currently in the banking system, the Federal Reserve has ample time to consider the best long-run framework for policy implementation. The Federal Reserve believes it is possible that, ultimately, its operating framework will allow the elimination of minimum reserve requirements, which impose costs and distortions on the banking system" -- Federal Reserve February 10, 2010

mikla's picture

I was just sitting here this evening thinking to myself, "Self!  What the world needs is more LEVERAGE.  Wouldn't that be neato?"

I certainly don't think we have enough.  People are afraid of system instabilities now, so we should just increase the LEVERAGE so they don't have to be afraid anymore.  What could *possibly* go wrong?

unwashedmass's picture

not everyone is fooled.....rumor is the chinese are back and buying tonight in the gold market......and silver sneakin' up quietly......

some people understand its time to buy "the real".......take delivery of "the real".....and go sit quietly in a corner that's far, far, far away from the stock and bond markets.......

Saxxon's picture

Operative in 2019 you say?  Self-serving, handlicking, powerhumping technocrats.  Humping the pantleg of the Illuminati.  They are the same the world over.

tom a taxpayer's picture

Too little, too late.

The European banking system is unlikely to survive til the Jan 1, 2013 Basel BS starting gate, let alone the many years to full implementation in 2019.

Nothing. The Basel Committee on Banking Supervision did nothing that takes effect immediately. Member countries must translate the rules into national laws and regulations before this date.

Typical bankster propaganda smoke and mirrors.

AC_Doctor's picture

July of 2019?  WTF,  we will not make it to July of 2012...

Beans, bullets and band-aids boys...


Id fight Gandhi's picture

I agree. The more you read this shit the more you play for end game.

unwashedmass's picture


the most exciting thing to watch this week is going to be this going to be the week that JPM loses its ability to maintain the fantasy that silver is worth less than 20? in the face of the shortages around the world? in the face of the hordes demanding delivery from the COMEX....which the Comex may ...or MAY NOT have ......

and just how far is Ben willing to fund the effort to maintain the fantasy????

or is this one of the many times Bennie Boy is just going to give his gang of thugs the magic word, then print the money to keep silver down.....and give the bill to the US taxpayer?

I love the fact that bonds are being sold to help maintain the ongoing fraud in metals.....that my kid is going to spend her working life paying off these bonds that are being issued simply to help the largest institutions steal from investors worldwide.....

LooseLee's picture

Agreed! Silver is looking like a coiled spring about to go ballistic and gold is hanging in there!


Hall 9000's picture


George Carlin Video: The Truth About Wall Street And Washington 

"Carlin discusses education, honesty and accountability (or lack thereof) from politicians, the sickening power of Wall Street lobbyists, corporate control over Washington, regulatory capture, and political corruption.   All the themes you know and love."

Boilermaker's picture

Seriously...only 20X?  I was honestly expected much much more.

mikla's picture

It *is* much more.  Reporting is based on the "honor system", with no checks and balances, and numerous things are not subject to review (for example, we can all *assume* that all sovereign debts have no chance of default).

Leverage in reality is currently north of 40:1 (many larger institutions greater than 100:1), and banks are not required to raise capital.

This is the "new accounting rules" equivalent to the "Stress Tests".

Maniac Researcher's picture

I'm surprised no one is yet talking about the legacy of the BIS on this thread. Anybody remember Leon Fraser?

Id fight Gandhi's picture

Which part the suicide speculation?

Maniac Researcher's picture

According to local police, it was a suicide.

However, I do find the timing of his death suspect, considering he was spending an enormous amount of time and energy trying to get BIS dividend payments to US shareholders from Switzerland (when these accounts were blocked because of the Trading with the Enemy Act) right before he died. Fraser managed to secure the deal using First National Bank of NY accounts. [citation - the Thomas H. McKittrick papers at the Baker Library, Harvard Business School]

doolittlegeorge's picture

So DB owns the German Post Office now.  Exactly who can buy DB?  Is that the sound of "nobody"?  Oh, wait.  Of course...the German GOVERNMENT can "buy them."  Of course one must not speak of what DB just did as an outright nationalization lest the 2nd biggest private bank in Germany (Goldman Sachs?) decide "we have an answer for that."  Yes, yes?  Of course I'm just some stupid truck driver who may have just been given a clue as to how your daughter is gettin' her smack.  Interesting how a fisherman if willing to throw a little bait out there of his own can find that "the bad guys just open right up to the world."  Indeed "you might even be working for them."  Thank God for the police and quality narco's.  We'll see how the follow up goes.

hugolp's picture

Including the "Government sponsored agencies" as highly liquid assets is going to bring lots of pain in the future.

Expect all kind of shenanigans with all that cheap funding and then a big final crash, while politicians say that nobody saw that coming and its the market fault.

bankonzhongguo's picture

Basel III and its "2019" date merely sets the tone to nations that they need to get medieval on thier banks.  Its no mistake that the FDIC is making its road show and letting everyone know that 800 banks are on the watch list.  They want the banks to go the way of the newspapers, soda pop and the family farm.  Capital control will be the game of the land, but an interesting dynamic will be insurance companies - especially oufits like UnitedHealth Group, WellPoint and Aetna.  All that Obamacare mandates for an uncontrolled private tax to be paid to these guys means they have the capital a la government requirement to purchase a private "service" (Just what value does insurance bring to the table again?)  Don't be surprised to see a WellPoint buy BAC or Citi during the End Times and watch that measly $1 billion community bank get merged into the TBTF borg.

VeloSpade's picture

I don't care if its Basel I, II, or III...they all sound like a very rare and highly contageous venereal disease, spawned from the interbreeding of homosexuals and monkeys that first commenced in 1783, in what is now called Africa.

LMAO's picture

I was about to read the article for some in depth information on the ins and outs of the said agreement. Then it struck me.... right in the middle of the article in bold.....This was all I needed to know:


"U.S. Banking Agencies Express Support for Basel Agreement"




firstdivision's picture

Woohoo!  This is awesome news.  It means that business as usual to a total destruction in the next 2 years. 

malek's picture

Farcism in its purest form.

Great work in pointing that out, TD!

honestann's picture

None of this matters one bit.  The powers-that-be change the rules more often than most folks take a shower.  And these days, they don't even need to change the rules to permit any action that any bank might want to take.  They simply value the air inside their buildings at $37 trillion per cubic foot, add that to their "balance sheet", leverage it up 100x or so, and play, play, play.

One major reason gold will continue to shine is the growing realization that everything official is pure, unadulterated fraud... plus the observation that physical gold is 100% real.