Tim Fernholz says Basel III is a tough new international regime, a rare sign of optimism in the battle with the banks:
When the market crashed, the limits of those standards became apparent: Suddenly, reserves were worthless. Liabilities increased as debts that hadn't been counted in the ratio were called in. Banks across the financial system were on the brink of becoming insolvent; some, like Bear Stearns, Lehman Brothers, and Wachovia, simply failed. In response, the U.S. government backstopped banks with public money until they, and the economy, could recover.
