{"id":5803,"date":"2012-10-23T02:10:23","date_gmt":"2012-10-23T06:10:23","guid":{"rendered":"http:\/\/goldstocksforex.com\/?p=5803"},"modified":"2012-10-23T02:10:23","modified_gmt":"2012-10-23T06:10:23","slug":"financial-ecosystems-can-be-vulnerable-too-ft-com","status":"publish","type":"post","link":"https:\/\/thepatientinvestor.com\/index.php\/2012\/10\/23\/financial-ecosystems-can-be-vulnerable-too-ft-com\/","title":{"rendered":"Financial ecosystems can be vulnerable too &#8211; FT.com"},"content":{"rendered":"<p>By Robert May<\/p>\n<blockquote>\n<p>[Andy Haldane, Financial Stability Director of the Bank of England] argues that complexity may obscure more than it illuminates. He illustrates this by comparing predictions about the chances of failure for a sample of 100 global banks in 2006, based on simple leverage ratios (assets\/equity) with the corresponding complex, Basel III-style risk-weighted one. The simple metric wins decisively.<\/p>\n<\/blockquote>\n<p>via <a href='http:\/\/www.ft.com\/intl\/cms\/s\/0\/a6ee48b4-0d63-11e2-99a1-00144feabdc0.html#axzz2A5kDpjEg'>Financial ecosystems can be vulnerable too &#8211; FT.com<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Robert May [Andy Haldane, Financial Stability Director of the Bank of England] argues that complexity may obscure more than it illuminates. He illustrates this by comparing predictions about the chances of failure for a sample of 100 global banks in 2006, based on simple leverage ratios (assets\/equity) with the corresponding complex, Basel III-style risk-weighted &hellip; <\/p>\n<p class=\"link-more\"><a href=\"https:\/\/thepatientinvestor.com\/index.php\/2012\/10\/23\/financial-ecosystems-can-be-vulnerable-too-ft-com\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;Financial ecosystems can be vulnerable too &#8211; FT.com&#8221;<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[31],"tags":[393,590,2091,2973],"class_list":["post-5803","post","type-post","status-publish","format-standard","hentry","category-the-fed-banks-interest-rates","tag-basel-iii","tag-capital-ratios","tag-leverage-ratios","tag-risk-weighted-assets"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Financial ecosystems can be vulnerable too - FT.com - the patient investor<\/title>\n<meta name=\"robots\" content=\"noindex, follow\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Financial ecosystems can be vulnerable too - FT.com - the patient investor\" \/>\n<meta property=\"og:description\" content=\"By Robert May [Andy Haldane, Financial Stability Director of the Bank of England] argues that complexity may obscure more than it illuminates. He illustrates this by comparing predictions about the chances of failure for a sample of 100 global banks in 2006, based on simple leverage ratios (assets\/equity) with the corresponding complex, Basel III-style risk-weighted &hellip; Continue reading &quot;Financial ecosystems can be vulnerable too &#8211; FT.com&quot;\" \/>\n<meta property=\"og:url\" content=\"https:\/\/thepatientinvestor.com\/index.php\/2012\/10\/23\/financial-ecosystems-can-be-vulnerable-too-ft-com\/\" \/>\n<meta property=\"og:site_name\" content=\"the patient investor\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/profile.php?id=61572934660810\" \/>\n<meta property=\"article:author\" content=\"https:\/\/facebook.com\/people\/The-Patient-Investor\/61572934660810\/\" \/>\n<meta property=\"article:published_time\" content=\"2012-10-23T06:10:23+00:00\" \/>\n<meta name=\"author\" content=\"Colin Twiggs\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Colin Twiggs\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/thepatientinvestor.com\\\/index.php\\\/2012\\\/10\\\/23\\\/financial-ecosystems-can-be-vulnerable-too-ft-com\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/thepatientinvestor.com\\\/index.php\\\/2012\\\/10\\\/23\\\/financial-ecosystems-can-be-vulnerable-too-ft-com\\\/\"},\"author\":{\"name\":\"Colin Twiggs\",\"@id\":\"https:\\\/\\\/thepatientinvestor.com\\\/#\\\/schema\\\/person\\\/d42b18d516a80149d739845749ac6454\"},\"headline\":\"Financial ecosystems can be vulnerable too &#8211; FT.com\",\"datePublished\":\"2012-10-23T06:10:23+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/thepatientinvestor.com\\\/index.php\\\/2012\\\/10\\\/23\\\/financial-ecosystems-can-be-vulnerable-too-ft-com\\\/\"},\"wordCount\":79,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\\\/\\\/thepatientinvestor.com\\\/#organization\"},\"keywords\":[\"Basel III\",\"capital ratios\",\"leverage ratios\",\"risk-weighted assets\"],\"articleSection\":[\"Banks &amp; Interest Rates\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/thepatientinvestor.com\\\/index.php\\\/2012\\\/10\\\/23\\\/financial-ecosystems-can-be-vulnerable-too-ft-com\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/thepatientinvestor.com\\\/index.php\\\/2012\\\/10\\\/23\\\/financial-ecosystems-can-be-vulnerable-too-ft-com\\\/\",\"url\":\"https:\\\/\\\/thepatientinvestor.com\\\/index.php\\\/2012\\\/10\\\/23\\\/financial-ecosystems-can-be-vulnerable-too-ft-com\\\/\",\"name\":\"Financial ecosystems can be vulnerable too - FT.com - the patient investor\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/thepatientinvestor.com\\\/#website\"},\"datePublished\":\"2012-10-23T06:10:23+00:00\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/thepatientinvestor.com\\\/index.php\\\/2012\\\/10\\\/23\\\/financial-ecosystems-can-be-vulnerable-too-ft-com\\\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/thepatientinvestor.com\\\/index.php\\\/2012\\\/10\\\/23\\\/financial-ecosystems-can-be-vulnerable-too-ft-com\\\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/thepatientinvestor.com\\\/index.php\\\/2012\\\/10\\\/23\\\/financial-ecosystems-can-be-vulnerable-too-ft-com\\\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/thepatientinvestor.com\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Financial ecosystems can be vulnerable too &#8211; FT.com\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/thepatientinvestor.com\\\/#website\",\"url\":\"https:\\\/\\\/thepatientinvestor.com\\\/\",\"name\":\"The Patient Investor\",\"description\":\"Smart. 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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. 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With an average ratio of 11.5% (September 2011),\u2026","rel":"","context":"In &quot;Australia &amp; NZ&quot;","block_context":{"text":"Australia &amp; NZ","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/countries-regions\/australia-nz-countries-regions\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":8399,"url":"https:\/\/thepatientinvestor.com\/index.php\/2013\/09\/08\/vickers-calls-for-doubling-of-bank-capital-levels-ft-com\/","url_meta":{"origin":5803,"position":2},"title":"Vickers calls for doubling of bank capital levels | FT.com","author":"ColinTwiggs","date":"September 8, 2013","format":false,"excerpt":"\u201cIt is not very sensible to run a market economy on the basis of a banking system that is 33 times leveraged, let alone 40 or 50 times leveraged,\u201d Sir John [Sir John Vickers, Oxford academic who chaired the Independent Commission on Banking] told the Financial Times. He believes the\u2026","rel":"","context":"In &quot;Banks &amp; Interest Rates&quot;","block_context":{"text":"Banks &amp; Interest Rates","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/economy\/the-fed-banks-interest-rates\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":6182,"url":"https:\/\/thepatientinvestor.com\/index.php\/2012\/11\/14\/back-to-basics-a-better-alternative-to-basel-capital-rules-thomas-m-hoenig\/","url_meta":{"origin":5803,"position":3},"title":"Back to Basics: A Better Alternative to Basel Capital Rules &#124; Thomas M. Hoenig","author":"Colin Twiggs","date":"November 14, 2012","format":false,"excerpt":"FDIC Director Thomas Hoenig calls for a simple capital ratio of Tangible Equity\/Tangible Assets instead of the complex measures proposed by Basel III. Using Tier 1 capital measured according to Basel III standards overstates tangible equity capital by about 40 percent and using risk-weighted assets makes capital adequacy ratios even\u2026","rel":"","context":"In &quot;Banks &amp; Interest Rates&quot;","block_context":{"text":"Banks &amp; Interest Rates","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/economy\/the-fed-banks-interest-rates\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":10283,"url":"https:\/\/thepatientinvestor.com\/index.php\/2014\/07\/13\/keep-bank-regulation-as-simple-as-possible-but-no-simpler\/","url_meta":{"origin":5803,"position":4},"title":"Keep bank regulation as simple as possible, but no simpler","author":"ColinTwiggs","date":"July 13, 2014","format":false,"excerpt":"Reading Andrew Bailey's summary of what the Bank of England has learned about bank capital adequacy over the last decade, it strikes me that there are four major issues facing regulators. Firstly, simple capital ratios as applied by Basel I encourage banks to increase the average risk-weighting of their assets\u2026","rel":"","context":"In &quot;Banks &amp; Interest Rates&quot;","block_context":{"text":"Banks &amp; Interest Rates","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/economy\/the-fed-banks-interest-rates\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":10835,"url":"https:\/\/thepatientinvestor.com\/index.php\/2014\/09\/07\/financial-reform-call-to-arms-ft-com\/","url_meta":{"origin":5803,"position":5},"title":"Financial reform: Call to arms | FT.com","author":"ColinTwiggs","date":"September 7, 2014","format":false,"excerpt":"Martin Wolf on how much capital banks should be required to hold: The new regulatory regime is an astonishingly complex response to the failures of this model. But \u201ckeep it simple, stupid\u201d is as good a rule in regulation as it is in life. The sensible solution seems clear: force\u2026","rel":"","context":"In &quot;Banks &amp; Interest Rates&quot;","block_context":{"text":"Banks &amp; Interest Rates","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/economy\/the-fed-banks-interest-rates\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/posts\/5803","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/comments?post=5803"}],"version-history":[{"count":0,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/posts\/5803\/revisions"}],"wp:attachment":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/media?parent=5803"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/categories?post=5803"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/tags?post=5803"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}