January 2, 2008 (LPAC)--New banking regulations, which were concocted to make access to credit easier for speculative operations, are about to backfire on the incompetents who believed the fast-buck boom could go on forever.

As of Jan. 1, 2008, new regulations on minimum capital requirements by the Bank for International Settlements came into effect. The main change is the introduction of a flexible minimum capital requirement for bank reserves. Essentially, banks are allowed to put their own rating on the riskiness of their holdings, used as reserves, rather than stick to an 8% fixed minimum reserve requirement. The banks' valuation must be certified by an external agency. This is known as the internal ratings-based, or "advanced" approach.

But there's a hitch. The value of the "advanced" reserves can go down, as well as up, meaning that the banks become more bankrupt than they already are. Furthermore, even implementing the system is proving difficult. In the current breakdown of the world financial system, it has become next to impossible to set a value on the trillions in worthless financial paper which the banks hold as reserves for making new loans.

The entire world banking and monetary system is, already, as doomed as the dinosaur, and will not be repaired without the adoption of measures for which Lyndon H. LaRouche has become both famed and defamed for proposing over the past four decades.