Thursday, 17 March 2011

Brilliant insights shared by Lord Turner, FSA Chair, but 2keyPt?? Leverage, Maturity Transformation & Financial Stability: Challenges Beyond Basel III

Leverage, Maturity Transformation and Financial Stability: Challenges Beyond Basel III:

it was big shame that I missed the speech last night, but as many great regulators nowadays, his speech & slide decks are already available from FSA site!

It is ashame that the regulatory structure of UK will yet be changed again... but one thing I have observed, which is key challenge for maintaining any financial industry, which is this:

1.) is it feasible for any of mathematical genius to 'predict' what the intricate and maybe less inter-linked companies, markets, & instruments might behave in a continuously changing financial, geopolitical & natural disasters afflicted world??

2.) have you also noticed that Cash was not mentioned in the slides and only twice in passing in the speech??

This is the reason why GamBond®and how we work together with industry to create a custom but focused default risk insurance industry. It is so paramount as we recognise that one can only predict so much regarding how industry perform and KPIs defined/measured, but by focusing on cash flow and with the value chain, GamBond® know how to rate, monitor and put a price on future default risk(s) of a sector worldwide.

It is very different view to look at the situation but in short, we DO NEED a different view to rate, monitor industries from a long perspective. This will re-focus how companies are formed, structured, and run.. we need to cut these endemic short-term-ism as too many companies and people get hurt!

What do you think??

"Between 2007 and 2009 the global financial system suffered a huge crisis, with major harmful macroeconomic effects. In response, a major programme of regulatory reform has been launched and is part complete.

Last year we agreed a major reform of bank capital and liquidity standards – Basel III.
This year the Financial Stability Board will decide measures to address problems created by systemically important financial institutions (SIFIs) – by banks seen in the past as ‘too big to fail’.
These changes will make a major difference..."

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