Basel III still contains seeds of more chaos

Commentary feature in which author argues that new bank capital rules unveiled earlier in september 2010 by the Basel Committee are strict enough to all but guarantee that a future meltdown will not take place, judging by the headlines they garnered. Taxpayers, it is implied, should applaud such political boldness.

Not quite. Regulators have so far failed to correct the mechanisms that unleashed the 2007-08 cataclysms. The crisis was caused by one main factor: widespread toxic leverage inside big financial institutions. As things currently stand, the probability of its re-emergence remains intolerably high.

ESO: Background information: Bankers poised for Basel III accord http://www.europeansources.info/record/bankers-poised-for-basel-iii-accord/

ESO: Background information: Now we must build on Basel’s good work http://www.europeansources.info/record/now-we-must-build-on-basels-good-work/

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