O/T Coronavirus Thread (3)

[WanChaiMiller]

Gm. Spot on, exactly as I understanding it. But the terms of how to apply for the loan is clearly not the point Im making.

[gm_gm]

Gm. Spot on, exactly as I understanding it. But the terms of how to apply for the loan is clearly not the point Im making.

Sorry Wan, thought id covered your liquidity crisis point on the basle 3 accord.

I did say theres no liquidity crisis YET. If you are familiar with the "Cobra" effect which relates to the East India offering locals money for the heads of cobras in the 1600s, some enterprising Indians started to breed Cobras which became a business! When the EIC realised their mistakes and abandoned the plan, in turn the locals released the cobras back into the wild and India now had more cobras than before!

Basle 3 is similar in so much that the banks have to hold capital and asset ratios of rough 2:1 for most borrowings, so the moneys there....it may well be that the regulators may have to revisit Basle 3 to allow the banks to lend more

Edit...lend more but cautiously with further risk based criteria