In the following video, Motley Fool financial analysts Morgan Housel and Matt Koppenheffer discuss the Basel Committee's recent softening of its Basel III liquidity capital rules. While stringent requirements that banks maintain a certain level of cash liquidity do protect against another liquidity crisis like the one that led to the financial disaster in 2008, they hamper banks' ability to lend money if the banks are forced to maintain that money on their balance sheets; it slows economic growth. Morgan tells us here how the new softening of the rules gives banks more options, but doesn't come without risk.
The Basel Committee softens some of its regulations, which is great news for banking investors.
About the Author
Morgan Housel is the best-selling author of The Psychology of Money and Same as Ever. A former economics and finance columnist for Fool.com and analyst for Motley Fool One, he currently serves as a partner at The Collaborative Fund and on the board of directors at Markel.
