4 ms·

"Mouthwatering returns and safe" simply means that the risk has been well disguised (e.g. is off balance sheet / using creative accounting) and it hasn't blown

"Mouthwatering returns and safe" simply means that the risk has been well disguised (e.g. is off balance sheet / using creative accounting) and it hasn't blown up yet. It's the same situation in Australia and Canada. Their time will come.

nikatwork 13y ago
> simply means that the risk has been well disguised (e.g. is off balance sheet / using creative accounting) Basel2 creates end-to-end transparency[1]. It is specifically designed to prevent hiding risks. [1] http://www.investopedia.com/articles/07/basel2.asp http://www.investopedia.com/articles/07/basel2.asp
- zzleeper 13y ago
  Not really, it has tons of flaws, some of which they are now trying to fix with Basel 3: http://en.wikipedia.org/wiki/Basel_III http://en.wikipedia.org/wiki/Basel_III
  - nikatwork 13y ago
    Basel2 is not perfect, but it's one million times better that what many banks were using previously (nothing). I work with banks so I've seen it firsthand. TFA was talking about how successful such systems have been in Sweden and Oz; let's hope Basel3 is even better.
- crdoconnor 13y ago
  Banks can use their own risk models to set minimum capital levels: http://www.ft.com/cms/s/0/0e8404a2-e54e-11dc-9334-0000779fd2ac.html http://www.ft.com/cms/s/0/0e8404a2-e54e-11dc-9334-0000779fd2... Dial down the hubris please.
  - nikatwork 13y ago
    Apologies, that was aggressive. I've edited for tone.
- wisty 13y ago
  I thought Basel II was depreciated after a spot of instability in 2007. After that, they started moving to Basel III.
dagw 13y ago
The thing with Sweden is they've already had 'their time'. Sweden went through a major banking crisis in the early 90's and any stability you are seeing now is the result of painful lessons learned.
josephlord 13y ago
> "Mouthwatering returns and safe" simply means that the risk has been well disguised (e.g. is off balance sheet / using creative accounting) and it hasn't blown up yet. Or there is a severe lack of competition (and consumer protection regulation).

nikatwork 13y ago

> simply means that the risk has been well disguised (e.g. is off balance sheet / using creative accounting) Basel2 creates end-to-end transparency[1]. It is specifically designed to prevent hiding risks. [1] http://www.investopedia.com/articles/07/basel2.asp http://www.investopedia.com/articles/07/basel2.asp

zzleeper 13y ago
Not really, it has tons of flaws, some of which they are now trying to fix with Basel 3: http://en.wikipedia.org/wiki/Basel_III http://en.wikipedia.org/wiki/Basel_III
- nikatwork 13y ago
  Basel2 is not perfect, but it's one million times better that what many banks were using previously (nothing). I work with banks so I've seen it firsthand. TFA was talking about how successful such systems have been in Sweden and Oz; let's hope Basel3 is even better.
crdoconnor 13y ago
Banks can use their own risk models to set minimum capital levels: http://www.ft.com/cms/s/0/0e8404a2-e54e-11dc-9334-0000779fd2ac.html http://www.ft.com/cms/s/0/0e8404a2-e54e-11dc-9334-0000779fd2... Dial down the hubris please.
- nikatwork 13y ago
  Apologies, that was aggressive. I've edited for tone.
wisty 13y ago
I thought Basel II was depreciated after a spot of instability in 2007. After that, they started moving to Basel III.

dagw 13y ago

The thing with Sweden is they've already had 'their time'. Sweden went through a major banking crisis in the early 90's and any stability you are seeing now is the result of painful lessons learned.

josephlord 13y ago

> "Mouthwatering returns and safe" simply means that the risk has been well disguised (e.g. is off balance sheet / using creative accounting) and it hasn't blown up yet. Or there is a severe lack of competition (and consumer protection regulation).