File this under "No, really?"

“I am concerned the recent proposals out of Basel will result in weak and perhaps even nonbinding provisions that provide credit to banks for holding forms of capital that have little or no value in absorbing losses,” said Senator Ted Kaufman, Democrat of Delaware. “The financial reform bill includes only a promise of higher capital requirements for U.S. banks, which we were told were going to be negotiated on an international level.”

Two words "gentlemen": National Sovereignty.

Screw "international" anything.  Banks are licensed in a nation by that nation's government.  That license is conditioned on adherence to that nation's laws.

BIS can stick it where the sun doesn't shine if you two, along with the rest of Congress, will grow a sack and demand it.

The problem with BIS' "proposals", as I pointed out the other day, is that it permits the sort of leverage that led to Lehman and Bear Stearn's collapse.  It is a direct financial******job that, if allowed to stand, completely neutralizes the "no bailout" policy and "prudential regulation" you both claim to support.

Of course we might some day get you two clowns to admit that Hankey Pankey Paulson's original "strident request" for the SEC to be "prudent" in allowing investment banks to run more than 14:1 leverage - a request that he was sent packing with in 2000, but got in 2004, both when he was with Goldman Sachs before becoming Treasury Secretary, was the proximate cause of both of those firm's failures!

From there, of course, the logical course of action would be to reinstate the former 14:1 leverage limit.  That would, of course, dramatically limit the stealing, er, "profits" that those very same banks could extract from the productive economy.

The screaming that accompanies any such proposal (including claims that "they'll just go somewhere else") should be met with the following response: "That's fine.  Go ahead and leave.  But if you won't conform to our laws, you're not doing business here, nor with any public company that is listed here.  Have a nice life, jackass, with your access to the world's largest market cut off."

Why?

Because if some bankster wants to do things that will lead to them blowing up - as all Ponzi schemes inevitably do (and leverage is always a Ponzi in some form or fashion), while operating an asset-stripping scheme (which all banking inherently is) then we want them to blow up someone else's economy - not ours.

Yes, we need a banking system.  Yes, we need a way to clear payments and legitimately intermediate credit.

No, we do not need trillions of credit-default swaps, interest-rate swap contracts with notional values exceeding global GDP by a couple of orders of magnitude, and 20%+ of our economy being siphoned off for a few fat cats on Wall Street - and to your grinning delight, as Bloomberg's nice photo shows.

The new rules, informally known as Basel III, would force banks to double their capital levels, some analysts expect. Since the onset of the credit crisis in 2008, U.S. voters favor tougher bank regulations, opinion polls show.

Right.  Remember that I've been saying for quite some time that some major European banks are running leverage as high as fifty to one?  Yep.  So this would "only" require them to run 33:1, roughly.  Oh, and they get to "count" as "capital" minority stakes in other firms - even though equity has the potential to go to zero, and thus to count it as capital is an absolute FARCE.

Never mind that BIS proposes to give the banks eight years to get their leverage under "control" - defined as "equally as bad as Lehman and Bear Stearns just before they detonated."

Might I remind Frank and Dodd that after the smoking hole appears in the economy it's too late to think about putting a lid on financial weapons of mass destruction?  How many smoking holes do we need to see before we recognize this little bit of reality?

30:1 leverage is a Ponzi scheme folks, and we're out of suckers.

Congress needs to tell BIS to stick it.