The mystery of stress tests for banks
Marketplace All-in-One
Marketplace
4.5 • 1.4K Ratings
🗓️ 1 January 2025
⏱️ 8 minutes
🧾️ Download transcript
Summary
We all have our hopes and dreams for 2025. For bankers, that includes clarity on the Basel III Endgame rules and if they will get tougher or easier on how banks calculate risk and how much cash they set aside for emergencies. The rules have been delayed in part because the initial proposals proved controversial, and led to an unlikely coalition of interests banding together to oppose them. Also on the show: The BBC’s Leanna Byrne speaks with Tom Cheesewright, an applied futurist, about what he sees as this year’s key economic workplace trends.
Transcript
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| 0:29.9 | The mystery of stress tests for banks. I'm David Brancaccio. We all have our hopes and dreams for |
| 0:36.9 | 2025. For bankers, on that list is clarity on what's charmingly called the Basel 3 end game, if the rules will get tougher or easier on how banks calculate risk or how much cash they set aside for emergencies. The rules have been delayed in part because the initial proposals |
| 0:54.3 | proved controversial and led to an unlikely coalition of interests banding together to oppose them. |
| 1:00.2 | Marketplaces Nova Safa has been following this and looking into what we might see in 2025, Nova. |
| 1:05.7 | That's right. And David, in fact, it is quite a strange group of bedfellows there, |
| 1:10.3 | climate change groups, advocates for lower income lending, joining with big banks |
| 1:14.4 | and opposing the rules proposed by federal regulators. |
| 1:17.3 | Yes, those rules are known as the Basel 3 endgame. |
| 1:19.9 | Perhaps they're charming, but also they're odd. |
| 1:22.3 | And that term has to do with the Bank of International Settlements located in Basel, Switzerland. |
| 1:26.9 | It helps facilitate |
| 1:27.8 | global banking. There have been a series of reform suggestions coming out of Basel, which were |
| 1:32.3 | inspired by the financial crisis. They're intended to strengthen major banks. The United |
| 1:36.5 | States is now trying to implement the final round of these reforms, and that's where the |
| 1:40.7 | controversy lies. The banking industry is arguing that what U.S. regulators want to do is just too strict, |
| 1:46.7 | and it'll make it harder for some people to get loans, home mortgages, and affordable credit card rates, |
| 1:51.7 | especially, David, people on the lower end of the income spectrum. |
| 1:56.0 | Why would that be? |
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