Bank Regulators Quibble Over Banking Regulations

The public has little idea how unsure the regulators are about the rules they want to lay down for the banks they are to regulate. No one has a unqualified standard that makes common sense to all concerned.

What securities, for example, should make up a bank’s net assets? Are a government’s bonds really safe if that government is on the verge of bankruptcy? What should measure a bank’s liquidity during a financial emergency?
And my pet peeve with bank regulators: Allowing accounting such as mark-to-market during the 2008-09 financial meltdown, when daily bank net worth was marked down simply because there was no real market to determine those bank asset values. And securities market short-sellers were thus able to take advantage of the unreal lower values that resulted. (See the Earl J. Weinreb NewsHole® comments.)