“Basel Accord(s) Failures – Why – The Start of a Change”
“Basel Accord(s) Failures – Why – The Start of a Change”
© 2015 Research Solutions, Inc. (all rights reserved)
We have been publishing quite a bit about the Basel Accord(s), as well as issues about Basel III and the disintegration of common-sense methodologies and protocols as a result of a non-unified set of standards, compliance and reconciliation “recommended” procedures.
First, we represent no financial institution or bank, nor do we have any financial interest(s) in any of them as a result of our work or assignments. We are a threat and fraud assessment institution of over 35+ years and have remained segregated to preserve our credibility.
The opinions we render are the result of decades of working in these disciplines and maintaining the history of failures within these facets, especially regarding regulatory reform measures.
There is “no question” that the Basel Accords(s) were a guaranteed failure from the start.
The “intentions” of the Basel Accords was honorable, but as we have said time and time again, they were:
Did not utilize some of the best resources of information and advice available;
Those who “drafted” it represented specific countries that are “highly” questionable in their own “compliance” standards, let alone willing to “adopt” the Basel III protocols;
Created more paperwork and compliance standards that has bottlenecked financial institutions, banks and regulatory commissions / organizations;
But worst of all, people don’t truly understand it – even many of those who “drafted” them don’t.
This is truly in response to a question posed to us addressing our prior article about resources not used:
The SEC was not counseled “directly” regarding issues and problems that they constantly run into. We find this amazing since they are a “first responder” in relation to regulatory practices and reconciliations that Basel III is supposed to have adopted.
Yet, the SEC was only consulted for “secondary” input, nor was there a full-time or part-time advisor utilized during the accord(s) creation and review process.
The United States Treasury, as with the SEC, was not consulted with regarding money movement and Virtual Currency Transactions (VCT) which we find an amazing oversight.
The Internal Revenue Service was not even considered as a resource for reporting compliance. Only a single questionnaire was utilized and not a single issue raised was even considered.
Homeland Security and the National Security Agency, which has a massive amount of historical data addressing illegal money activities and so-on, was NOT considered.
Our list could go on and on, but most important, the banks and financial institutions, which have been struggling with the burden of massive paper-compliance and regulations which are redundant and make no sense (if not paradoxical), were NOT counseled with.
The original logic of the Basel Accord(s) was to keep their operation at arms-length from the institutions which they were planning to recommend to regulate; but yet many of those on the Basel Accord(s) committees had “direct” interests in their own financial institutions; were on board of directors or major stockholders in financial institutions; and in the case of two of the countries involved with the accords, these countries were some of the worst offenders of financial reporting, financial frauds and illegal money movement.
This is fact–
Almost half of the financial world will not every comply or adopt any of the Basel Accord(s) methodologies, let alone compliance standards.
That means, in the simplest sense, that “uniform compliance” is impossible to reach, let alone trust.
Anyone, or any country as that matters, can make laws and regulations; however that doesn’t make them right, effective and functional.
The Basel Accord(s) is one of the worst disasters that the financial marketplace has had rammed down their throats, and it will NOT stop financial disasters WHEN they happen.
It will not mitigate the damages caused, let alone reduce the number of frauds.
In fact, the Basel III standards, as with its predecessors, will assure MORE loopholes, MORE methods for frauds and illegal money movement than ever before, while at the same time crippling the regulatory bodies which Basel III is supposed to assist.
The legitimate financial institutions and banks are hobbled in their day-to-day activities with redundant and no-sense paperwork that is slowing the investment and banking processes to a crawl. This is not business, this is unacceptable.
Then who benefits by Basel III?
That question can be best answered by the money launderers, terrorist organizations that can move virtual currency at-will, and clearing houses that bank, invest and profit with impunity. This is just a short-list of those who “benefit” from Basel III…
The question is what is the alternative?
A. To halt the entire Basel Accords(s) from future “analysis and using them as a “standard” for financial investment compliance.
B. To bring together ALL parties who are involved with financial and banking operations, standards, compliance enforcement and so-on, and establish a multi-panel system that would be assigned COMMON SENSE requirements of:
- How the financial and banking systems work;
- To address regulatory and enforcement issues;
- To bring in as many agencies and government regulatory bodies that can provide historical information and intelligence on financial activities and their weaknesses – issues of money laundering and financial investment abuse and so-on so NOT to re-invent a broken wheel, but to identify the true issues of compliance reporting and financial investment reconciliation that is clear and concise;
- What the standards are for recognized GAAP reporting and monitoring;
- To examine the interactions of international money movement;
- To define the weaknesses of money movement and monitoring;
- To establish a CORE foundation of compliance standards which WOULD be accepted and adopted by all legitimate countries that truly wish to have accountability;
- To look and address the requirements needed to comply with the standards of reporting and to make it as streamlined and as uniformed as possible;
- To make sure those involved with this CHANGE are not representing self-serving interests or have ties to illegal operations or money laundering (which seems to be a major oversight of the Basel participants…);
- To establish a “reasonable” timetable for implementation of recommendations made; and
- To have all panels to review, modify and adopt the first phase of the new standards as well as the proposed timetable.
This may be the beginning of a down-and-dirty list, but it is RAW draft of a common-sense approach that incorporates ALL participants required to truly start a “standard” that can be adopted without regret – a standard that takes into account all parties that work within the financial and banking communities and investment markets in league with those who would regulate them.
One party cannot possibly understand the other UNLESS they are combined and able to develop a “common denominator”, which the Basel Accord(s) has NEVER addressed, let alone reached…
It never will.
Research Solutions, Inc.