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Basel II to Basel III?

Discussion in 'Property Finance' started by Arashi87, 30th Jun, 2015.

  1. Arashi87

    Arashi87 Well-Known Member

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    19th Jun, 2015
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    Location:
    Sydney
    Hi PC fellows...

    Firstly can anyone explain to me in simple language what is "Basel" ?

    And I heard off a friend who just had a meeting with ING team saying that there's chance we moving towards Basel III? which will affect bank valuation on properties becoming more conservative?

    Cheers
    Alan
     
  2. Kinnon Bell

    Kinnon Bell Finance Broker

    Joined:
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    Cairns
    Basel was introduced so that should the proverbial hit the fan the banks won't fall down in a heap. It was Basel II in place when the GFC hit and Basel III is in response to that.

    It has to do with the amount of risk the banks take on and the assets they need to hold which contributes to their Capital Adequacy Ratio.

    Basel III is stating that the banks need to raise their CAR and also hold a certain amount of fairly liquid assets.

    They will need to get this extra capital somehow...

    I can see how they might think it will impact bank vals but IMHO I dont think it will directly impact the vals.
     
    JenW and Arashi87 like this.
  3. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

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    Are you sure they weren't talking about share valuations?

    Kinnon's given a good summary. Increasing CAR's means higher end costs to consumers - either across the board or pushed into certain products (if they want to bash investors further).
     
  4. Arashi87

    Arashi87 Well-Known Member

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    19th Jun, 2015
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    Location:
    Sydney
    Thanks for the explaination! I am certain they were walking about property valuation. Maybe it won't go that far ... Maybe ...