Making Banks Fail-Free

                                   

Banks in Europe and America are always under pressure to add to capital, under stress rests, in order to withstand any potential, future credit problems.

                       

Risk-weighted assets can be assumed to be as high as 70% of total assets in the large U.S. banks. The stress figure in Europe is half that for various accounting reasons; which are not that strong; the assessments are pretty much subjective.

                       

Yet, it’s all nonsense. Panic-driven problems will negate supposed cushions as will a tendency to have mark-to- market accounting.

                       

Much of what goes on is political maneuvering and posturing. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)