In Abernathy’s American Banker article published today, he continues,
The idea that bankers must manage their liquidity positions is a good one. The idea that a college of experts in Switzerland can tell bankers around the world how to do it is unreasonable, and dangerous. Liquidity is a chameleon, directly affected by the local environment, which in turn is subject to change in many ways, predictable and otherwise.Abernathy describes communications he has had with a banker in South Africa, noting Basel standards crafted in Switzerland will be applied from New York to Soweto.
When I raised concerns that Basel capital rules would contract bank services, my South African colleague recast the issue in starker terms. Authorities could encourage growth or they could repress the banking industry, but not both. As he saw it, the authorities have, for now, chosen repression.Read the full article by following our ABARegPolicy twitter account, on the left hand side of the Dodd-Frank Tracker homepage.