Bankers want your pants

In the “Harry and Louise” (brought to you by the coalition to scare your pants off) thread, I mentioned I have been seeing TV adverts screaming that people won’t be able to obtain loans if big bad gummit has it’s way.

The “way”, is known as “Basil III endgame”, a policy to require banks to maintain capital backing appropriate for the level of risk in their loan portfolio, according to standard measures, rather than the banks “policing themselves” (which worked so well in 2008).

Here is a piece off the wire explaining “Basil III endgame”.

And the website the banker’s lobby has set up…heh, the puzzlewits can’t even post their video so it is viewable.

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The fewer bad loans the cheaper capital is.

In fact the more the banks lend the less capital there is available going forward to lend and the higher rates go.

In econ that is part of what is called The Crowding Out Theory. The money supply is only x size at any given time.

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