Following months of intense industry pressure, regulators say they now plan to make it easier for banks to comply with a key provision of new international banking rules that will require lenders to maintain sufficiently deep pools of safe, liquid assets—like cash and government bonds—that can survive market meltdowns and other crises…..Among the planned changes, one would allow a wider variety of assets—such as gold and equities—to count toward banks’ liquidity buffers, according to people involved in the talks.
….Some experts warn that loosening the rules could lead banks to rely on assets that later become unsafe. “The widening of the definition [of eligible assets] can spell trouble, because we may discover illiquidity precisely when the liquidity is needed,” said Anat Admati, a professor at Stanford University’s Graduate School of Business.
via Regulators Weigh Easing of Global Bank Rules – WSJ.com.
Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters.
Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.
Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.
He founded PVT Capital (AFSL No. 546090) in May 2023, which offers investment strategy and advice to wholesale clients.
