FDIC vice-chair says Basel III capital requirements provide illusion of safety

Thomas Hoenig

Basel III's capital requirements are allowing banks to present a facade of safety while taking on more and more leverage, Thomas Hoenig, vice-chairman of the Federal Deposit Insurance Corporation (FDIC), said yesterday.

In remarks to a conference of the International Association of Deposit Insurers, held in Basel, Hoenig said once regulatory capital weightings are set, banks immediately set about finding ways of reporting risk-weighted assets that are far smaller than their actual assets under

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