Gorman may be thinking about saving the cash in order to meet capital ratios set by the upcoming Basel II standards.

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The new capital standards, called Basel II, will lower the capital requirements for commercial banks, making them more in line with those governing the brokers.

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There are currently three accords, Basel I, Basel II, and Basel III being the most recent and pertinent, the latter being agreed upon following the financial crisis of 2007-2008.

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There is also plenty of information about Basel II on the website of the Bank for International Settlements.

ECONOMIST: Sources and acknowledgements

Basel II left the minimum capital requirements at 8% of risk-weighted assets.

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Basel II has been heavily criticized for increasing the effect of the financial crisis of 2007-2008.

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Do you start seriously complying with Basel II requirements now or do you wait until the music stops and there is a definitive policy established?

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It was back in 2004 in response to tough Basel II requirements that had just come out that we first glimpsed the mother of all modeling nightmares.

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