Basel III: How The Bank For International Settlements Is Going To Help Bring Down The Global Economy

[ThePythonicCow]

One of the major mechanisms being used to "Reset" Western economies and nations is an enforced collapse of Western banking, resulting in confiscation of wealth and property on a massive scale, the collapse of banks and governments, and debt slavery.

One key means to collapse Western banking is the enforcement of increasingly severe banking standards. The Basil II accords played a key role in the financial crisis of 2008, and the Basil III accords are now in place and scheduled to take increasingly severe effect over the next six years, 2013 through 2019.

Most likely the Basil III accords will provoke a second, more severe and lasting, financial, economic, monetary and political crisis in Western nations.

From Michael T. Snyder -- Basel III: How The Bank For International Settlements Is Going To Help Bring Down The Global Economy (http://theeconomiccollapseblog.com/archives/basel-iii-how-the-bank-for-international-settlements-is-going-to-help-bring-down-the-global-economy) (May 28th, 2013):




A new set of regulations that most people have never even heard of that was developed by an immensely powerful central banking organization that most people do not even know exists is going to have a dramatic effect on the global financial system over the next several years. The new set of regulations is known as "Basel III", and it was developed by the Bank for International Settlements. The Bank for International Settlements has been called "the central bank for central banks", and it is headquartered in Basel, Switzerland. 58 major central banks (including the Federal Reserve) belong to the Bank for International Settlements, and the decisions made in Basel often have more of an impact on the direction of the global economy than anything the president of the United States or the U.S. Congress are doing. All you have to do is to look back at the last financial crisis to see an example of this. Basel II and Basel 2.5 played a major role in precipitating the subprime mortgage meltdown. Now a new set of regulations known as "Basel III" are being rolled out. The implementation of these new regulations is beginning this year, and they will be completely phased in by 2019. These new regulations dramatically increase capital requirements and significantly restrict the use of leverage. Those certainly sound like good goals, the problem is that the entire global financial system is based on credit at this point, and these new regulations are going to substantially reduce the flow of credit. The only way that the giant debt bubble that we are all living in can continue to persist is if it continues to expand. By restricting the flow of credit, these new regulations threaten to burst the debt bubble and bring down the entire global economy.

Not that the current global financial system is sustainable by any means. Anyone with half a brain can see that the global financial system is a pyramid scheme (http://theeconomiccollapseblog.com/archives/why-is-the-world-economy-doomed-the-global-financial-pyramid-scheme-by-the-numbers) that is destined to collapse. But Basel III may cause it to collapse faster than it might otherwise have.

So precisely what is Basel III? The following is a definition from the official website (http://www.bis.org/bcbs/basel3.htm) of the Bank for International Settlements...
"Basel III" is a comprehensive set of reform measures, developed by the Basel Committee on Banking Supervision, to strengthen the regulation, supervision and risk management of the banking sector. These measures aim to:
improve the banking sector's ability to absorb shocks arising from financial and economic stress, whatever the source
improve risk management and governance
strengthen banks' transparency and disclosures.


All of that looks good at first glance. But when you start looking into the details you start realizing what it is going to mean for the global financial system. Banks are going to be required to have higher reserve ratios and use less leverage. Banks are going to have to be more careful with their money, which is a good thing, but it is also going to mean that credit will not flow as freely. Unfortunately, the only way for a debt bubble to survive is if it keeps expanding. Anything that restricts the flow of easy money threatens to bring a debt bubble to an end.

These new regulations are going to be phased in between 2013 and 2019. You can see a chart which shows the implementation schedule for the Basel III regulations right here (http://thepythoniccow.us/Basel_III_phase-in_arrangements.jpg).

[Lifebringer]

sure sounds like the "A21" section that says after the people have no confidence to put in place their own to monitor, and to re-affirm the trust to continue to live off US/other humans, via their paid representative in DC.

They want the system to be air tight of theft like the mob, and anyone caught robbing the "Conglomerate" is offed. I'm watching the Witness Protection Program rep on C-span on line as I type and WE really need to remove the older guys that don't get it, and really protect, rechange the identities of the innocent, caught in the crosshairs for some criminal elements in this country.

White collar crime is the worst, as they think they leave no trail, but for the last 40 years, the trail is littered with $$breadcrumbs leading back to the culprits. Once WE know, and give it over to the Father for solutions, they are done, simple as that.

[schneider]

I thought one of the main reasons for Basell 3 was to create a system to back currencies with hard assets. The strength of a country's currency needed to be backed by something of value like gold, oil, natural gas or other commodities.

[ThePythonicCow]

Stick a fork in it :).

This weekend, the Bank of International Settlements (BIS) in Basel, released their annual report, and both in the report and an accompanying speech, made it quite clear that the money pumping, quantitative easing days of the central banks (such as the Federal Reserve) must and will come to an end.

Zerohedge reports on this in the article The Bank Of International Settlements Warns The Monetary Kool-Aid Party Is Over (http://www.zerohedge.com/news/2013-06-23/bank-international-settlements-warns-monetary-kool-aid-party-over), which begins:

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When a month ago the Central Banks' Central Bank, aka the Bank of International Settlements (or BIS) in Basel where the MIT central-planning braintrust (http://www.zerohedge.com/news/2012-12-12/how-handful-unsupervised-mit-economists-run-world) meets every few months to decide the fate of the world, warned that the Fed-induced collateral shortage (http://www.zerohedge.com/news/2013-05-29/bank-international-settlements-warns-about-dangers-rehypothecation) is distorting the markets, few paid attention. That the implication behind said warning was that QE can not continue at the current pace, was just as lost. A few short weeks later following the biggest plunge in markets since 2011 in the aftermath of Bernanke's taper tantrum, some are finally willing to listen.

However, they will certainly not like what the BIS just released as a follow up, both in the form of the BIS' 83rd Annual Report, and the speech by Jaime Caruana to commemorate said annual meeting. For the simple reason that it reads like a run of the mill Sunday morning Zero Hedge sermon, which says, almost verbatim, that the days of kicking the can via flawed monetary policy are now over, and that the time for central banks to end the monetary morphine drip has finally come.

The BIS message, as summarized by the FT (http://www.ft.com/intl/cms/s/0/455af4a6-dc09-11e2-a861-00144feab7de.html), is that "central banks must head for the exit and stop trying to spur a global economic recovery... cheap and plentiful central bank money had merely bought time, warning that more bond buying would retard the global economy’s return to health by delaying adjustments to governments’ and households’ balance sheets."

Here is a better summary of the BIS' unprecedented U-Turn on its 5 year long monetary strategy, in its own selected words:

Can central banks now really do “whatever it takes”? As each day goes by, it seems less and less likely... Six years have passed since the eruption of the global financial crisis, yet robust, self-sustaining, well balanced growth still eludes the global economy. If there were an easy path to that goal, we would have found it by now.

Monetary stimulus alone cannot provide the answer because the roots of the problem are not monetary. Hence, central banks must manage a return to their stabilisation role, allowing others to do the hard but essential work of adjustment.

Many large corporations are using cheap bond funding to lengthen the duration of their liabilities instead of investing in new production capacity.

Continued low interest rates and unconventional policies have made it easy for the private sector to postpone deleveraging, easy for the government to finance deficits, and easy for the authorities to delay needed reforms in the real economy and in the financial system.

Overindebtedness is one of the major barriers on the path to growth after a financial crisis. Borrowing more year after year is not the cure...in some places it may be difficult to avoid an overall reduction in accommodation because some policies have clearly hit their limits.

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There's plenty more to this article, at The Bank Of International Settlements Warns The Monetary Kool-Aid Party Is Over (http://www.zerohedge.com/news/2013-06-23/bank-international-settlements-warns-monetary-kool-aid-party-over).

[Bill Ryan]

Bumping this thread with a 10-minute ITM update published a few hours ago.

U.S. Basel III Deadline Approaches as Central Banks Brace for Gold Reset


http://www.youtube.com/watch?v=nEzdg7XMbx8