Resources for Basel II Capital Accord (Basel II)

Europe the worst of all, while Basel II won’t wash

www.thesheet.com

In another paper to a closed conference held by the Reserve Bank of Australia this week on the financial turmoil of 2007 and 2008, Adrian Blundell-Wignall, the deputy director of the enterprise and financial affairs directorate of the OECD (and a former executive of the Reserve Bank, Bankers Trust and Westpac), skewers plenty of pundits and the “official family” (to use his term).

The introduction to Blundell-Wignall’s paper, in the original dot point format, and with light editing, is as effective as any alternative journalism on his much longer review of the background and implications of the current mess.

• Financial bubbles associated with leverage and the crises to which they give rise are always a consequence of distortions somewhere in the world economy.

• The economic consequences of the bursting of the sub-prime bubble are only in their early stages. The banking system is short of capital, both in the US and in Europe (where people seem, perhaps wrongly, to be very sanguine about the likely fallout).

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