⚡Towards Basel III Endgame: The Final Push for Banking Stability⚡

🏛️ The Federal Reserve just delivered some serious news: starting October 1, big banks must comply with new individual capital requirements.

💱 These requirements are intended to make sure banks have enough liquidity to weather financial storms. But there's more to the story, and it's all related to Basel III and the Bank for International Settlements (BIS).

🇨🇭 The Basel III Endgame is a global regulatory framework that aims to strengthen bank capital requirements, ensuring banks have enough high-quality capital (such as cash and government bonds) to cover potential losses.

🏦 The BIS, the bank of central banks, has been guiding this framework, making sure everyone meets minimum liquidity standards. Why? To avoid another financial crisis like the one in 2008.

💡 Here's the catch: if banks fail to meet these requirements, they face automatic restrictions on dividend and bonus payments, and worse, they could trigger a loss of confidence leading to a potential banking collapse.

💹 The Fed's latest move is part of this push to ensure stability. Each bank's capital requirements are based on rigorous stress tests that take into account everything from economic shocks to operational risks.

📊 What happens if a bank doesn't have enough liquidity? We could see a domino effect. As we approach the end of Basel III, the stakes of understanding these changes are crucial for both banking and retail investing in the financial future.

🪙 Global net purchases of gold by central banks reached 483 tonnes in the first half of 2024, the most on record. This is 5% more than the previous record of 460 tonnes set in the first half of 2023.

💎"To the wise"💎