2017-11-25 06:34:00 Sat ET
stock market competition macrofinance stock return s&p 500 financial crisis financial deregulation bank oligarchy systemic risk asset market stabilization asset price fluctuations regulation capital financial stability dodd-frank
Mario Draghi, President of the European Central Bank, heads the international committee of financial supervisors and has declared their landmark agreement on a thorny set of revisions to Basel 3. Many bankers and pundits refer to these revisions as Basel 4. While many banks prefer to standardize their equity capital calculations under Basel 3, several multinational banks apply their own internal risk models to gauge appropriate common equity capital ratios. Now the primary concern relates to the unfortunate outcome that the minimum regulatory capital results would become lower for a given large bank if one chose to apply another bank's internal risk models. This discrepancy might arise from the fact that each bank exhibits different exposure to specific risk types such as commercial real estate default risk and operational risk. Due to this concern, Basel 4 revisions can fill the gap between fact and fiction to help circumvent regulatory arbitrage.
Large banks would need to incorporate loan-to-value ratios into the internal risk models of residential mortgage default risk. On balance, the overall capital floor is 72.5%, which reaches a healthy middle ground between the U.S. preference for 75% and the European tendency toward 70%. Proponents of U.S. financial deregulation suggest that substantially lifting the average capital ratio from 7% to 12%-15% would likely increase the prohibitively high cost of capital for banks, insurance companies, credit unions, and other financial institutions.
If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.
2019-07-01 12:35:00 Monday ET

Apple releases the new iOS 13 smartphone features. These features include Dark Mode, Audio Share, Memoji, better privacy protection, smart photo collection,
2018-05-29 11:40:00 Tuesday ET

America and China, the modern world's most powerful nations may stumble into a **Thucydides trap** that Harvard professor and political scientist Graham
2018-01-05 07:37:00 Friday ET

Warren Buffett cleverly points out that American children will not only be better off than their parents, but the former will also enjoy higher living stand
2018-03-09 08:33:00 Friday ET

David Solomon succeeds Lloyd Blankfein as the new CEO of Goldman Sachs. Unlike his predecessors Lloyd Blankfein and Gary Cohn, Solomon has been an investmen
2022-02-02 10:33:00 Wednesday ET

Our proprietary alpha investment model outperforms most stock market indices from 2017 to 2022. As of early-January 2023, the U.S. Patent and Trademark O
2019-09-30 07:33:00 Monday ET

AYA Analytica finbuzz podcast channel on YouTube September 2019 In this podcast, we discuss several topical issues as of September 2019: (1) Former