nigelforbes

It is not that bigger banks have to maintain higher liquidity, the watering down of Dodd-Frank meant that smaller banks had to hold less, initially the line was set at banks with less than US 10 bill. but this was changed under Trump. Basel III Teir 1 capital adequacy ratio is 10.5%, under Dodd Frank it was initially set at 6%. I wrote elsewhere today that US CAR is one of the lowest in the world and averages 14%, only Russia and Morocco are lower whilst European banks average 20% of more, Argentina is 30%. https://www.investopedia.com/terms/d/dodd-frank-financial-regulatory-reform-bill.asp

It works perfectly well, TAT bought dozens of them for predicting tourist arrivals numbers.

Day traders always appeared to me to be wave dodgers, dancing at the edge of the water as the incoming tide advances and recedes, trying not to get their feet wet. The game works well until the inevitable happens, sometimes you just can't be quick enough or imagine accurately the power of the wave.

Do I win a prize?

Gravity?

Interesting to note that US banks have the lowest capital adequacy ratio (CAR) of any country (14%), apart from Morocco, Russia and Bolivia. The UK is 21%, most European banks are over 20% whilst countries such as Argentina are closer to 30%. Basel III CAR is now 10.5% for Teir 1 and 2 capital. I'm not clear what the argument is that warrants the US to be substantially lower and requires Europe to be higher, even Thailand is close to 20%. I suppose it might indicate a greater willingness on the part of the US Fed to ride to the rescue in times of distress, perhaps this is a trade off they make. https://www.ceicdata.com/en/indicator/united-states/capital-adequacy-ratio#:~:text=in Jun 2022%3F-,United States Capital Adequacy Ratio was measured at 14.7 % in,table below for more data.

If the banks risk management and Treasury functions are doing their jobs properly, the bonds will be tiered and closely matched to their liabilities so this shouldn't be a big problem for many banks. If the value of the bonds are marked to market rather than classified as hold until maturity, this further eases the potential burden. But it depends which regulatory framework the banks exist within, clearly if it's the US these things aren't always done the way way they should be.

I think this is a private consideration and not the banks concern, depositors assume the risk when they deposit large amounts and if they don't they do something about it. Plus I don't know who offers this type of insurance any more, Swiss Re used to be the go to company for this but I thought they got out of the business.

Some posters seem to be trying to build a case to prove anything and everything, apart from what actually exists. The bail out wasn't done on behalf of connected friends, wokeism wasn't a factor, the FDIC didn't drop the ball, taxpayers won't be in hock for a thousand years and the moon landing wasn't filmed in a studio, and so on and so on. Plain and simple, it was a good old fashioned screw up, a couple of folks didn't do the job they were supposed to do and it highlighted a couple of weaknesses in the banking system, resulting from frequent rapid interest rate rises. These things happen from time to time, they are part of the development process. It's time to move on.

Without even watching the video, SVB collapsed because of asset liability mismatches and bad management. We can go back and trace underlying reasons for those things, including a change in the law, including the CEO being improperly trained, including the risk manager not having a clue, but they will still all boil down to those two core reasons.

SB not SVB, I stand corrected.

So how do you account for Ivanka Trump being on the Board, if they were all so woke and so politically aligned!

Nonsence! You saw what happened to bank stocks globally, you saw the impact on large banks such as CS who came under greater scrutiny as a result, you saw what happened to global equity markets and pension funds. All those things happened WITH a helping hand, can you even begin to think what would have happened if they had done nothing! I get it that you have a boner for bank bail outs and the wealthy, do try and be a little more objective however, it will serve you well in later life!

As I wrote in a separate thread, this appears to be a combination of historic issues that were already being addressed, along with the momentum of herd mentality.....as ever, short sellers were in on the act also. CS's liquidity levels are just fine and more than adequate, they also now have the backing of the Swiss Central Bank. All banks are now becoming targets, even robust ones such as JP Morgan which has seen it stock fall by over 5%. At some point, actions and soothing words from Central Banks will make all of this settle down then things can return to normal.

Another useful summary of the things that happened regarding CS. There is no doubt that CS had some issues last year regarding customer confidentiality, which led to deposit withdrawls. But the restructuring efforts were already underway and the issues were being addressed so I don't see these things as being relevant to their current situation. It looks as though the bond value/interest rate issue that nailed SVB, surfaced once again at a time when CS was preparing to issue its annual report. The US SC, already nervous following the SVB debacle, saw the same bond/interest rate issues at CS and challenged their draft annual report which was subsequently withdrawn and is being amended. That news made an already nervous market even more nervous. The big difference of course is that CS has substantially more liquidity than SVB had plus it now has the public backing of the Swiss Central Bank. I don't believe there is a story here but the public and markets may take some time before they understand this. https://www.afr.com/companies/financial-services/credit-suisse-is-in-crisis-what-went-wrong-20230316-p5csiz

Below, a useful comparison (with chart) puts the Credit Suisse/SVB liquidity issue into perspective. Much of this seems to be herd momentum and short selling rather than legitimate concern regarding financial stability and ability. CS is a global systemically important bank. https://www.ft.com/content/983f7f7d-5429-4f54-a93a-1f079794e409

You do not need to declare income that is earned but not remitted. Similarly, income that is earned and remitted but is excluded, eg US SSc Retirement Income, does not need to be declared. Only relevant income should be declared.

Bills in the 000,s quickly appear in these places, followed by serious beatings if you don't pay up. There have been plenty of stories about them in this forum, best to avoid such places and stick with the normal tourist go-go bars.

The Daily Mail says so!

Er, no, the DPA guarantees it, the DPA is a an agency whose Board comprise government, BOT, legal and financial and economic experts.

you're!

We don't disagree. It can be argued however that with their high value customer account base and almost complete lack of traditional small value customers, that short term funding requirements were excessive and probably couldn't be met (am unsure). The bank run saw about 25% of their deposits withdrawn, even the best capitalized banks in the US don't have 25% short term liquidity, Basel Tier 1 and II capital adequacy ratio's are nowhere near that level.

From the OP link above. "highlight Thailand’s strong financial sector with padded levels of capital reserves and a very low level of foreign debt, with over 98% borrowed at home in Thai baht, as insulating the kingdom, to a great extent, from any possible contagion or threat that may develop. Thailand retains one of the most well-capitalised financial systems not only in Asia but in the world which makes the baht an attractive currency for speculators". On the other hand, no bank in Thailand features in the top 50, best Tier 1 capitalised banks so make of this what you will. I think however the statement above is probably true since Thai banks borrow and lend in THB, almost exclusively hence there is almost no foreign currency risk. https://www.thebankerdatabase.com/index.cfm/search/featured

Did I say it never happens! I merely gave you a link to policy on the topic you were discussing. It is however not a simple matter to transfer money out of China, above and beyond the low monthly limits set by government. We have Chinese friends and neighbors who frequently have problems paying school fees here, for this reason. The casino's of Macau used to be a popular route but that has now largely closed plus there are onerous restrictions on bank accounts in Hong Kong for mainlanders.

In China, companies, banks, and individuals must comply with a “closed” capital account policy. This means that money cannot be freely moved into or out of the country unless it abides by strict foreign exchange rules. https://www.tradecommissioner.gc.ca/china-chine/control-controle.aspx?lang=eng