Supervising Banks Liquidity Article Example | Topics and Well Written Essays - 500 words

Supervising Banks Liquidity - Article Example The committee in charge of outlining and preparing these regulations has decided that banks should easily have enough money on hand to last them for thirty days if their outside sources dried up, allowing them to finish business and become more prepared for what should happen after the money has run out entirely. The banking industry is none too thrilled about the new liquidity rules, which would have a questionable effect on how much it would cost them to raise money. Unfortunately, this does not cover some of the more major issues, such as the amount and depth of information banks are allowed to share with their investors and the public about how they go about raising money. However, regardless of the feelings felt by the banks, the rules that have been laid out by the committee are not going anywhere, nor are they to be altered unless something comes up that suggests they should be. As a sort of compromise for those that are against the new rules, the central bankers and regulators will be spending the time prior to the rules taking effect, which is in 2015, determining and evaluating the effect of the new rules. Other rules, such as those that will make sure that banks have reliable sources of long-term financing, will not be implemented until 2018. These additional rules would prevent what almost took place with Hypo Real Estate when it was unable to refinance long-term obligations and needed an emergency bail-out from the government.