Category: Basel rules

The emperor’s risk rating: Part 2, but no risk for me

12 January, 2012 (10:39) | Banks, Basel rules, Capital, Capital markets, Global news, Mortgages, Regulation, Securitization, Theory |

[Continued from yesterday's Part 1.]   By: David A. Smith   In both explicating and quarreling with Peter Wallison‘s most recent Wall Street Journal op-ed piece on the perils of regulation, particularly the Basel accords, we spent yesterday explaining the risk-weighting requirements and observing the perverse consequences of weighting pools of mortgage-backed securities (MBS’s) as [...]

The emperor’s risk rating: Part 1, risk for thee

11 January, 2012 (10:56) | Banks, Basel rules, Capital, Capital markets, Global news, Mortgages, Regulation, Securitization, Theory |

By: David A. Smith   Is there truly a risk-free security?  One for which no reserve is required?   Not worth the pixels it’s not printed with?   For more than a decade, Peter Wallison of the American Enterprise Institute has been crusading against government involvement in financial markets, particularly mortgage markets, so when he [...]