'First, the full implementation has been delayed from 2015 to 2019; banks will only need to meet 60 per cent of the requirements by 2015.
Second, the assets. Previously, qualifying assets were mostly limited to cash, government debt, reserves at central banks and some corporate bonds rated AA- or higher. But now banks now can hold the following securities for up to 15 per cent (after haircuts) of their high-quality liquid assets:
- Corporate debt securities rated A+ to BBB– with a 50% haircut
- Certain unencumbered equities subject to a 50% haircut
- Certain residential mortgage-backed securities rated AA or higher with a 25% haircut
The biggest change from the previous EU backed propsals is the inclusion of residential mortgage backed securities but with a 25% haircut ie only 75% of the book value of these loans are included in the qualifying amount and crucially the banks have four more years to meet the requirements.
The main benificiaries will be the French banks who were struggling to meet their political masters previous rules. Will they thank the BIS, theYanks and the non-EU bankers for in fact bailing them out. Non! It was all an American mess in the first place.
I do have some mis-givings about these propsals. It looks like a return to the system that created the mess in the first place. You can read the full account on the BIS web site. Its a good job the BIS is headquartered in Basle not Frankfurt or worse Paris.
On UK politics I saw N Farage on today's BBC Daily Politics with Jo Co. I thought he did well aided by Tory Cheryl Gilllan against Ming and the awful Tessa Jowell. Ms Gillan did a very good job as NF's minder. Its a pity UKIP does not get this message but they don't have anybody as able as Ms Gillan.
The photographs of Dave and Nick renewing their partnership vows like a pair of homosexuals in Beardie's church was political farce of the highest order.