[ARCHIVE] Make Your Move

Benefits from the Recent Changes to the Basel III Banking Regulations

Regulatory changes help set stage for growth in 2013 and mild downturn in 2014.

I have mentioned at many of my presentations that the Basel III regulations coming would tighten up the global credit markets, raise interest rates, and raise borrowing costs.  There was good news from the Basel Committee today.  They have lowered the capital and liquidity requirements that would have caused banks to restrict lending.

They have also broadened the definition of high-liquid assets while lowering their expectations of how much cash would be needed to cover 30 days of cash withdrawals.  This is a return to sound thinking and it bodes very well for our forecast of more economic growth in 2013 and for mildness in the downturn in 2014.

There is one additional piece of information that I found particularly interesting.  The banks have up to 2019 to meet the full requirements of the Liquidity Coverage Ratio.  That year will sound very familiar to anyone who has heard Brian, Jeff, Andrew or I speak anywhere. 

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Brian Beaulieu

Brian Beaulieu has been an economist with ITR Economics since 1982 and its CEO since 1987. He is also Chief Economist for Vistage International and TEC, global organizations comprised of over 13,000...

Alan Beaulieu

One of the country’s most informed economists, Alan Beaulieu is a principal of the ITR Economics where he serves as President. ITR predicts future economic trends with 94.7% accuracy rate and...
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