Basel III and the strengthening of capital requirement: the obstinacy in mistake or why “IT” will happen again
Please cite the paper as:
“Bernard Vallageas, (2012), Basel III and the strengthening of capital requirement: the obstinacy in mistake or why "IT" will happen again, World Economics Association (WEA) Conferences, No. 3 2012, Rethinking Financial Markets, 1st November to 31st December, 2012”
Since the financial liberalisation of the 80’s, the Basel committee on Banking Supervision wants to strengthen banks’ apital and other stable funding with the purpose of increasing banks’ financial security, as stable funding increases the security of the non-financial business sector. But bank capital has nothing to do with bank security and with money creation. It is shown, instead, that increasing banks’ stable funding entails a decreasing of the stable funding for the rest of the economy and
securitization. Thus this strengthening is harmful and the way for the financial sector to work in the interest of the economy is to separate deposit banks and other financial institutions, to strengthen banks’control and to recognize they do not need capital, and therefore no owners.