Banks Forced to Double Reserves

New financial guidelines were set by global officials meeting in Switzerland on Sunday. The agreement referred to as the Basel III agreement, requires the Banks to increase their capital cushion to 4.5% of assets. The current requirement is 2%.Banks will also be required to hold an additional 2.5 % of assets to protect against periods of future stress.

The increase will be done gradually with implementation of the new standards to commence Jan. 1,2013 and spread out over the next two years.

Bank watchdogs such as the Fed and FDIC will monitor and enforce the regulations once they have been adopted by each country.

The purpose of these new regulations is to avoid another financial crisis similar to that of 2008, which nearly precipitated a world wide depression.

Members of the Basel Committee on Banking Supervision (which is made up of delegates from 27 countries) are convinced that the new guidelines will help to stabilize the banking industry.

It appears investors agree as banking shares have shown a rally as a result of this news. Whether or not that rally can be sustained is anyone's guess, only the future will tell the true story. However, The Hoss feels this move is a step in the right direction.

Stay on Track,Money Magazine Hoss

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Banking And Finance

From The Hoss's Mouth

Banking and Finance

Banks or other financial institutions provide a valuable service in our society. The Hoss asks you to consider which option is better: keeping your money buried in the back yard, keeping it hidden in a mattress, or keeping it safe in a financial institution. Unless you are brain dead, you chose the "safe in a financial institution" option.

Horse race owners insure their primary assets: their horses. You insure your house, your car and your life. It only makes Hoss Cents that you insure your money by depositing it in a bank or financial institution of your choice. Federally insured institutions are protected up to $100,000 ($60,000 in Canada).

Selecting a bank or financial institution is similar to selecting a horse to wager on. You gather all available information, do the research and make a selection. You may not always pick a winner, but by doing the leg work you increase the odds of being successful.

The Hoss was extremely fortunate when it came to choosing a financial institution. When he married Mrs. Hoss she worked for a credit union that offered their employees many benefits (reduced fees) not available to non-employees. In all likelihood you are not in such a favorable position, so The Hoss has compiled a list of items for you to consider when deciding which bank or financial institution best fits your priorities. The Hoss points out that these are suggestions only and by no means a complete list of all items that may be of importance to you when choosing a bank or financial institution.

• Location: Do they have branches in areas frequented by you and your spouse?

• Visit each institution and evaluate customer service.

• Do they offer the type of account(s) you require?
  

• Are the hours of operation convenient?

• Do they have ATMs ?

• Do they offer Internet banking?

Compare the rates, fees and service charges on the following:

• bounced check fees
  

• safety deposit box charges

• ATM charges
  

• checking fees

• annual fees

• interest rates for loans

• interest rates on deposit accounts

Please feel free to leave a comment or add any tips you may have by clicking on the comment section of this blog.

Stay on track,
The Hoss

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