GOLDILOCKS
Banks have undergone several stress tests this year. They have, also, gone through a simulation of what is called a mirroring event of national news that would cause stress on the banking system.
Research has shown that the large banks are capable of undergoing extreme funding stress scenarios. For this reason, it is believed that a lessening of capital requirements will be needed to move forward.
This will enable more banks to be protected under new amended OCC and FDIC rules as we approach our transition from this economy to the next. Small to mid size banks are still at risk, and people need to be aware of these risks and able to mobilize their money if needed.
Commercial real estate appears to be the largest concern, and plans are already in place to reset this portion of our economy. Basel 3 has long been delayed, but this new report is very encouraging to transition into these new banking regulations.
As we have said several times in this room, Europe has a date of January 1st, 2025 to begin the implementation of their Basel 3 regulations. This is a target point for the rest of the world to reach, and many have come a long way.
Currently, less predictable testing for Capital Requirements are being suggested. We have, also, talked about this being a period of time when Credit Valuation Adjustments would take place on every level of the market, banking system, and Forex. It looks like we are doing that right now. These will continue to provide the needed information for International Valuation Standards Committee (IVSC) to begin there task of currency valuations at the end of January 2025.
© Goldilocks
https://www.nytimes.com/2024/06/26/business/bank-stress-tests.html
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