Press Briefing

Aug 20, 2010

Update: U.S. Response to Pakistan's Flooding Disaster
http://www.state.gov/r/pa/prs/ps/2010/08/146107.htm

The Lockerbie Bomber and Scotland's Disgrace - A political stunt freed a mass murderer and brought needless grief to many in the US
http://online.wsj.com/article/SB10001424052748703649004575437221006992494.html

Bashing Beijing Will Not Help Our Trade Deficit - Higher wages, not a stronger yuan, will help Chinese workers and reduce US imports
http://online.wsj.com/article/SB10001424052748704023404575429843465266202.html

State Dept: A Critical Milestone in Iraq
http://blogs.state.gov/index.php/site/entry/milestone_iraq

The SEC's Jersey Score - At last, a state gets hit for securities fraud
http://online.wsj.com/article/SB10001424052748704476104575439431857019668.html

Seniors Already Seeing Lower Prescription Drug Costs
http://www.whitehouse.gov/blog/2010/08/18/seniors-already-seeing-lower-prescription-drug-costs

More Countrywide Loans - What Senate ethicists didn't tell us on Dodd
http://online.wsj.com/article/SB10001424052748704554104575435851680516676.html

Remarks by the President at a Discussion with Ohio Families on the Economy
http://www.whitehouse.gov/the-press-office/2010/08/18/remarks-president-a-discussion-with-ohio-families-economy

Victory in Iraq  -American arms created a republic, if Iraqis can keep it
http://online.wsj.com/article/SB10001424052748704476104575439743828817562.html

An assessment of the long-term economic impact of stronger capital and liquidity requirements
FSB & BCBS, August 2010
http://www.bis.org/publ/bcbs173.htm

The Basel Committee's assessment of the long-term economic impact finds that there are clear net long term economic benefits from increasing the minimum capital and liquidity requirements from their current levels in order to raise the safety and soundness of the global banking system. The benefits of higher capital and liquidity requirements accrue from reducing the probability of financial crisis and the output losses associated with such crises. The benefits substantially exceed the potential output costs for a range of higher capital and liquidity requirements.

The FSB-BCBS MAG assessment of the macroeconomic transition costs, prepared in close collaboration with the International Monetary Fund, concludes that the transition to stronger capital and liquidity standards is likely to have a modest impact on aggregate output. If higher requirements are phased in over four years, the group estimates that each one percentage point increase in bank's actual ratio of tangible common equity to risk-weighted assets will lead to a decline in the level of GDP relative to its baseline path by about 0.20% after implementation is completed.  In terms of growth rates, this means that the annual growth rate would be reduced by an average of 0.04 percentage points over a four and a half year period, with a range of results around these point estimates. A 25% increase in liquid asset holdings is found to have an output effect less than half that associated with a one-percentage point increase in capital ratios. The projected impacts arise mainly from banks passing on higher costs to borrowers, which results in a slowdown in investment. A two-year implementation period leads to a slightly larger reduction from the baseline path, with the trough occurring after two and a half years, while extending the implementation period beyond four years makes little difference. In all of these estimates, GDP returns to its baseline path in subsequent years.


Winning the Peace in Iraq - The last American combat troops left Iraq this week. But when 'Operation New Dawn' begins on Sept. 1, the U.S. will still have a vital mission—and interests—there
http://online.wsj.com/article/SB10001424052748704476104575439381641164538.html

Get Ready for Ads in Books
http://online.wsj.com/article/SB10001424052748704554104575435243350910792.html

Proposal to ensure the loss absorbency of regulatory capital at the point of non-viability - consultative document
http://www.bis.org/publ/bcbs174.htm