Basel rules rescinded | Investment Research Dynamics
The rules originally established to help protect the system from bank
greed and fraud connected to derivatives were just rescinded by the same
Basel Committee that drafted the original blueprint – article link.
The original rules would have significantly curtailed the ability of
banks to underwrite the derivatives they sell to pension funds and hedge
funds. It would have required that the banks put up a lot more in
reserve capital, which in turn would have forced the banks to charge a
much higher premium – or cost to the buyers – for the derivatives it
sells. Make no mistake about it, AIG and Goldman would not have blown up
if both parties had been forced to properly reserve against their
derivatives contracts.
Noting to see here folks move along.. And as Denver Dave says at the end of the first article above:
"Anyone who understands what is going on here and
continues to keep their money inside the financial system is either
extremely naive or tragically stupid. Forewarned is forearmed."
No comments:
Post a Comment