Basel III & CBDCs: The Seismic Changes Facing The Global Financial System

• Basel III & CBDCs: The Seismic Changes Facing The Global Financial System
  by Alasdair Macleod via GoldMoney.com, via https://www.zerohedge.com/
  The role of commercial banks in the global economy is changing, with lending to governments and their agencies now more important than lending to goods and services industries. It is a trend which is due to continue.
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  The new Basel 3 regulations seem set to encourage this trend, despite retail depositors being accorded a stable funding status. Central bank digital currencies are anticipated to augment and perhaps replace non-financial business credit over the next five to ten years.
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  But the increasing financialisation of commercial banking brings the risk of tying its future firmly to a financial bubble. And with price inflation on the increase, it is only a matter of very little time before that bubble bursts. This article looks at some of the implications for commercial banking of Basel 3, CBDCs and the changing economic role of commercial banks.
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  Introduction
  The introduction of both Basel 3 banking regulations and central bank plans for digital currencies will affect commercial banks’ priorities and their role in the overall financial system. Basel 3, particularly with regard to the application of the net stable funding ratio (NSFR), will change banking priorities by imposing standardised risk factors across the industry, and central bank digital currencies (CBDCs) threaten to cut the banks out of their intermediary role between central banks and non-financial users of money and credit.
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