Risk-weighting – how to fake up resilience in a banking system

— as published by IREF Europe on 5th April 2023 —

Introduction

How resilient is the global banking system? Are banks’ capital buffers now much larger than they were going into the Global Financial Crisis of 2007/8, as authorities claim?

The buffers – called ‘Common Equity Tier 1’ (or CET1), ‘Tier 1 Capital’, and ‘Total Capital’ – stand […]

Bank Resolution is dead: authorities dare not use it – and instead risk destroying capital markets

— as published by IREF Europe on 29th March 2023 —

The template created after the Global Financial Crisis of 2007/8 to shield taxpayers from direct bailouts of failed banks has already folded – authorities dare not use it.

The template is to put failed banks into ‘resolution’, with retail and small business depositors receiving compensation up […]