capital

Higher Capital Reserve Requirements for Banks

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The Basel III rules just increased capital requirements for banks, from 2% to 7%.

Global regulators, aiming to prevent any repeat of the international credit crisis, agreed on Sunday to force banks to more than triple the amount of top-quality capital they must hold in reserve.

The biggest change to global banking regulation in decades, known as "Basel III," will require banks to hold top-quality capital totaling 7 percent of their risk-bearing assets, up from just 2 percent under current rules.

The rules may oblige banks to raise hundreds of billions of dollars of fresh capital over the next decade. Germany's banking association, for example, has estimated its 10 biggest banks may need 105 billion euros ($141 billion) of additional capital.

But to ease the burden on banks and financial markets, regulators gave the banks transition periods to comply with the rules. These periods, extending in some cases to January 2019 or later, are longer than many bankers originally expected.

But wait, some can hold off for up to 9 years! Believe this or not, many banks objected and it gets worse, it's total assets, not just capital capital. That includes derivatives:

BoA Tells Investors to Bail Out of China Due To No More Slave Labor

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Bank Of America, you know that corporation based in the United States, land of the free, home of the brave, is telling investors to sell because wages in China might have to rise.

Investors should sell shares of Chinese cement and metal companies as increases in labor costs will curb capital spending in those industries, according to BofA Merrill Lynch Global Research.

Seven Chinese provinces raised minimum wages in the first quarter after halting them last year amid the global recession, according to the Labor Ministry. Higher salaries may deter foreign investment in China, which has been a low-cost manufacturing base.

Astounding huh? The Yuan is still undervalued ranging up to 40%, yet the minute Chinese workers get anywhere with wages, investors should pull out.

Chinese Honda workers managed to get a 30% wage increase and 30 states increased the minimum wage by 15%. This amounts to $23.5 a month. That's a cocktail to investors. Suck it up!

I guess BoA just wants workers to continue committing suicide so as to not disturb ROI: