BUS-F 446 Lecture Notes - Lecture 8: Financial Statement, Thomas M. Hoenig, Basel Accords
Document Summary
Money market funds fell below during the financial crisis; they were supposed to be. Basel iii rules some have argued that basel rules are largely irrelevant, since banks continue to find their way around it. Federal reserve of st. louis, has argued this. There"s two types of capital: market value and book or historical value. Market value = market value of equity ownership shares outstanding/number of shares. Book value = (par value equity + surplus value + retained earnings + loan loss reserves) Mv probably makes more sense but may need adjusted for liquidity issues. If risks became greater, the distribution gets smashed down, tails get thicker, and risk goes up. Ii: agreed in 2004, just implemented here last year. Might be five years or more until implemented! See pages 611-614 or so for the pillars of basel ii. Basel ii was an addendum to basel i. basel houses the bank for international.
