US Debt now > GDP
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Nov12-11, 09:49 PM
I read something interesting today:
" New rules taking effect in the course of the decade will force banks to set aside at least minimal sums to cover the risk of government bonds. The so-called Basel III banking rules approved by the G-20 last year would require banks to hold capital reserves equal to at least 3 percent of all their holdings, regardless of the perceived risk. That rule, intended to prevent banks from taking on too much leverage or gaming banking regulations, would also apply to government bonds. But the rule, known as a leverage ratio, would not take effect until 2018 and could still change."
I wonder what implications this will have on future interest rates on government debt.