Two news reports one day apart read like eyewitness accounts of two different intersectional collisions at the same intersection, except that they reported on the same thing.
The Basel Committee on Banking Supervision reportedly relaxed new Reserves requirements which it recommended to governments in nations across the globe. The original Reserves recommendations of the Basel Committee were reportedly to take effect at the end of 2012, and would require Banks to have more Capital (i.e., Reserves) on hand to meet even extraordinary Debts such as those which contributed to the Great Recession through which we are now living. More recently, the Basel Committee has apparently "agreed to relax a proposal that stricter bank-capital requirements should come into effect from the end of 2012". Atsuko Fukase and Wiliam Launder, "Banks to Get Capital-Buffer Reprieve" p. C2, col. 2 (Wall Street Journal, Thursday, December 17, 2009), subscription required for online access.
The next day, the New York Times reported on the same meeting of the same Basel Committee on Banking Supervision. The Times report did not mention any relaxation of the Capital-Reserves recommendations. Instead, the Times reported that "[b]anks should hold on to more of their earnings and improve the quality of their assets to guard against the kind of shocks that brought the financial system to the brink of collapse, international financial regulators said Thursday." Matthew Saltmarsh and David Jolly, "Global Panel Proposes Stronger Rules for Banks" p. B9, col. 5 (New York Times Nat'l ed., "BusinessDay" Section, Friday, December 18, 2009).
Which is it: Reserves or no Reserves recommendations? I hope they made recommendations for greater Reserves, and I think you probably do, too. And sooner than 2012 in any event, if we are to have any hope to firewall another Great Recession before it happens.
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