Post by tonypro on Nov 30, 2012 14:36:20 GMT -6
Today the House Financial Services Committee is holding a hearing on the economic impact of new international bank capital rules, Smells like Globalization in motion. known as Basel III. Today's hearing comes as capital has emerged as a singular focus for many policymakers hoping to enhance the safety and soundness of the nation's banks and avoid a repeat of the 2008 crisis.
A bank's capital is the simple difference between the value of its assets and the value of its liabilities — the bank's net worth. DUH Typically comprised of investor equity, retained earnings, and various types of debt obligations, capital serves the important economic purpose of providing a buffer or cushion against which unexpected losses can be absorbed without jeopardizing the bank's viability.
A heightened focus on capital is entirely appropriate. Sufficient loss-absorbing capital is a critical aspect of any bank's health and stability. And it is certainly true that many banks held too little capital before the recent financial crisis. Another DUH
But it is also true that higher capital is not a silver bullet solution to the challenge of ensuring financial stability. This is true, the corruption should also be removed. In fact, unnecessarily high levels of capital can become problematic and even counterproductive. Counterproductive to WHO? The globalist that want to control, and own it all themselves?
Banks Are Healthy Again (NOT TRUE IMO - Shutterbug) Agreed!
Since the financial crisis, the capital position of U.S. banks has dramatically improved. Of course they are improved, after BILLIONS of dollars were thrown at them, and the fact they own a large part of the housing in our country....DUH In March, the Federal Reserve announced the results of the latest Comprehensive Capital Analysis and Review, better known as the "stress-test," which subjected the 19 largest banks to a severe crisis scenario.
The stress-test showed that since 2009 banks have nearly doubled their levels of Tier 1 common equity capital — the highest loss-absorbing form of capital. Is tax payer money. Overall, banking industry capital is at or near record levels.[1] Moreover, under the terms of the Basel III framework, the eight largest U.S. banks will be required to hold a surcharge of equity capital of between 1 and 2.5 percent of risk-weighted assets by 2019.
Commenting on the stress-test, Fed Chairman Ben Bernanke Such an obvious CROOK. stated: "Under this highly adverse scenario ... 15 of the 19 bank holding companies were projected to maintain capital ratios above all four of the regulatory minimum levels."
Strength Across the Board
This dramatic improvement in capitalization has been achieved(By route of Gov. tax collected funds from citizens.) even as banks have made other improvements that have significantly reduced their overall risk.
For example, liquidity has dramatically improved, with large banks more than doubling their holdings of cash and liquid securities.
Leverage has been reduced, in some cases cut in half.
Asset quality is far stronger, with problem loans declining for nine consecutive quarters to their lowest levels since early 2008. Again, thanks to our money.[2]
Risk management, internal controls, and governance procedures have been significantly enhanced.
And compensation structures at most banks have been reformed to closely align the personal incentives of bank employees with the long-term performance and safety and soundness of the employing institution.
Misguided Reforms LOL.. The bailout in a nutshell.
This progress notwithstanding, some members of Congress and other observers contend that banks should hold much more capital. Since capital protects banks from losses, the thinking goes, more and more capital will make banks safer and safer, and bank failures — and potential bailouts — less likely. OK, another DUH is in order here.
Such calls for ever-higher capital overlook the fact that additional capital is not without costs or consequences, and can become counterproductive or even dangerous. LIE
For example, too much capital can obstruct banks' I suppose it could since it would mean they are doing sound business. ability to perform their critical role in the economy by limiting their lending capacity. Which is what...exactly? Think about it, if you are a small, or large business, the more capital you have, the bigger the loan you can achieve to allow you to expand your company because you are deemed low risk. Low risk why?
Because of your capital. Common sense 101. An underperforming economy due to Gov. regs that are absolutely stifling small business. scarce credit ultimately undermines banks' This is correct, since loan interest is how they make profit, and there's nothing wrong with profit, as it is how any business stays in business. Why would credit be scarce? Let's see, due to gov. regs. that are continuing to eliminate the job creators there are fewer people working, and this automatically means fewer people purchasing anything, which again is 101 math. safety and soundness by impairing asset quality and earnings.
An overreliance on capital can also distract policymakers "Touche'." Why would a solid financial foundation distract 'policymakers'....HMmm, perhaps it's because that would mean you have something they haven't figured out how to take yet, and thus would require focus from their corruption. from other equally relevant aspects of safety and soundness, such as the nature and strength of a bank's assets, the rigor of its risk management framework, the soundness of its internal controls and governance procedures, the quality and diversity of its earnings, and the reliability of its liquidity position. Considered in isolation, outside the context of these other essential aspects of safety and soundness, a particular capital level has limited meaning or supervisory value.
Excessive capital can also become perverse — potentially incentivizing greater risk-taking by banks. Higher and higher levels of capital erode banks' return on equity (ROE), a key measure of profitability. What an Insane comment!! What could this possibly mean? We already own everything so we can't make profit on it?? I guess 2+2actually = 7. As ROE declines, banks' ability to attract the additional capital that regulators are requiring becomes more and more difficult. At some point, generating the returns necessary to attract additional capital from investors may require taking greater risk.
Capital is a critically important aspect of banks' safety and soundness. But as is the case in other contexts, sometimes there can be too much of a good thing. Rather than indulging in capital overkill to the detriment of economic growth and job creation, We need the guberment to get the he l l out of the way, to allow prosperity again, has nothing to do with the banks except the fact that they are a corrupt part of our controlling guberment. let's build on the progress achieved to date by allowing banks to do what they're intended to do — propel economic growth and job creation by supplying the credit that American businesses, homeowners, and consumers need. Another completely INSANE comment. Since when do banks create jobs, or economic growth? They DON'T, the entrepreneur, and small business owners do. Yes they generally get loans from banks for growth, but their success, or failure is their own...not the banks. They get there funds back with interest, and oh
, you don't get the loan to start with if you don't have enough capital, or collateral, which again is a contradiction to this windbags entire statement.
John R. Dearie, Executive Vice President at the Financial Services Forum, is a former officer of the Federal Reserve Bank of New York. The views expressed are his own. Enough said!!!!
[1] FDIC, Quarterly Banking Profile, First Quarter 2012
OK, I feel some better now...
Tony P.
A bank's capital is the simple difference between the value of its assets and the value of its liabilities — the bank's net worth. DUH Typically comprised of investor equity, retained earnings, and various types of debt obligations, capital serves the important economic purpose of providing a buffer or cushion against which unexpected losses can be absorbed without jeopardizing the bank's viability.
A heightened focus on capital is entirely appropriate. Sufficient loss-absorbing capital is a critical aspect of any bank's health and stability. And it is certainly true that many banks held too little capital before the recent financial crisis. Another DUH
But it is also true that higher capital is not a silver bullet solution to the challenge of ensuring financial stability. This is true, the corruption should also be removed. In fact, unnecessarily high levels of capital can become problematic and even counterproductive. Counterproductive to WHO? The globalist that want to control, and own it all themselves?
Banks Are Healthy Again (NOT TRUE IMO - Shutterbug) Agreed!
Since the financial crisis, the capital position of U.S. banks has dramatically improved. Of course they are improved, after BILLIONS of dollars were thrown at them, and the fact they own a large part of the housing in our country....DUH In March, the Federal Reserve announced the results of the latest Comprehensive Capital Analysis and Review, better known as the "stress-test," which subjected the 19 largest banks to a severe crisis scenario.
The stress-test showed that since 2009 banks have nearly doubled their levels of Tier 1 common equity capital — the highest loss-absorbing form of capital. Is tax payer money. Overall, banking industry capital is at or near record levels.[1] Moreover, under the terms of the Basel III framework, the eight largest U.S. banks will be required to hold a surcharge of equity capital of between 1 and 2.5 percent of risk-weighted assets by 2019.
Commenting on the stress-test, Fed Chairman Ben Bernanke Such an obvious CROOK. stated: "Under this highly adverse scenario ... 15 of the 19 bank holding companies were projected to maintain capital ratios above all four of the regulatory minimum levels."
Strength Across the Board
This dramatic improvement in capitalization has been achieved(By route of Gov. tax collected funds from citizens.) even as banks have made other improvements that have significantly reduced their overall risk.
For example, liquidity has dramatically improved, with large banks more than doubling their holdings of cash and liquid securities.
Leverage has been reduced, in some cases cut in half.
Asset quality is far stronger, with problem loans declining for nine consecutive quarters to their lowest levels since early 2008. Again, thanks to our money.[2]
Risk management, internal controls, and governance procedures have been significantly enhanced.
And compensation structures at most banks have been reformed to closely align the personal incentives of bank employees with the long-term performance and safety and soundness of the employing institution.
Misguided Reforms LOL.. The bailout in a nutshell.
This progress notwithstanding, some members of Congress and other observers contend that banks should hold much more capital. Since capital protects banks from losses, the thinking goes, more and more capital will make banks safer and safer, and bank failures — and potential bailouts — less likely. OK, another DUH is in order here.
Such calls for ever-higher capital overlook the fact that additional capital is not without costs or consequences, and can become counterproductive or even dangerous. LIE
For example, too much capital can obstruct banks' I suppose it could since it would mean they are doing sound business. ability to perform their critical role in the economy by limiting their lending capacity. Which is what...exactly? Think about it, if you are a small, or large business, the more capital you have, the bigger the loan you can achieve to allow you to expand your company because you are deemed low risk. Low risk why?
Because of your capital. Common sense 101. An underperforming economy due to Gov. regs that are absolutely stifling small business. scarce credit ultimately undermines banks' This is correct, since loan interest is how they make profit, and there's nothing wrong with profit, as it is how any business stays in business. Why would credit be scarce? Let's see, due to gov. regs. that are continuing to eliminate the job creators there are fewer people working, and this automatically means fewer people purchasing anything, which again is 101 math. safety and soundness by impairing asset quality and earnings.An overreliance on capital can also distract policymakers "Touche'." Why would a solid financial foundation distract 'policymakers'....HMmm, perhaps it's because that would mean you have something they haven't figured out how to take yet, and thus would require focus from their corruption. from other equally relevant aspects of safety and soundness, such as the nature and strength of a bank's assets, the rigor of its risk management framework, the soundness of its internal controls and governance procedures, the quality and diversity of its earnings, and the reliability of its liquidity position. Considered in isolation, outside the context of these other essential aspects of safety and soundness, a particular capital level has limited meaning or supervisory value.
Excessive capital can also become perverse — potentially incentivizing greater risk-taking by banks. Higher and higher levels of capital erode banks' return on equity (ROE), a key measure of profitability. What an Insane comment!! What could this possibly mean? We already own everything so we can't make profit on it?? I guess 2+2actually = 7. As ROE declines, banks' ability to attract the additional capital that regulators are requiring becomes more and more difficult. At some point, generating the returns necessary to attract additional capital from investors may require taking greater risk.
Capital is a critically important aspect of banks' safety and soundness. But as is the case in other contexts, sometimes there can be too much of a good thing. Rather than indulging in capital overkill to the detriment of economic growth and job creation, We need the guberment to get the he l l out of the way, to allow prosperity again, has nothing to do with the banks except the fact that they are a corrupt part of our controlling guberment. let's build on the progress achieved to date by allowing banks to do what they're intended to do — propel economic growth and job creation by supplying the credit that American businesses, homeowners, and consumers need. Another completely INSANE comment. Since when do banks create jobs, or economic growth? They DON'T, the entrepreneur, and small business owners do. Yes they generally get loans from banks for growth, but their success, or failure is their own...not the banks. They get there funds back with interest, and oh
, you don't get the loan to start with if you don't have enough capital, or collateral, which again is a contradiction to this windbags entire statement. John R. Dearie, Executive Vice President at the Financial Services Forum, is a former officer of the Federal Reserve Bank of New York. The views expressed are his own. Enough said!!!!
[1] FDIC, Quarterly Banking Profile, First Quarter 2012
OK, I feel some better now...
Tony P.
....
loans where people lied about their income, their checking/savings accounts, etc. to qualify for homes they should never have bought, for they really could not afford them. Greed at all levels, even among the middle income is evil. I only hope that we have all learned this lesson, so that when the CMKX, Dinar, PP, etc. funds are in hand - greed does not consume us again!