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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
In these dark days people tends to look for little shafts of light that spill from Heaven. But Alphaville is a decent blog, and does not want to be mean and selfish about what little brightness is shed upon us from time to time.
And so, Alphaville passes on the news to its readers that the European Systemic Risk Board has published the latest stage of its research programme into the overlapping capital requirements applicable to European banks, and the way in which the interaction of these capital requirements can mean that regulatory “buffers” on one capital ratio are not actually usable because of another.
They have even made available an open-source analytical tool to help people understand how the interactions develop in different scenarios:
. . . Lastly, the workstream was tasked with implementing agreed concepts and methodologies in an analytical tool — the buffer usability simulation tool (USIT) — and sharing the code for this with all ESRB members, following an open-source approach. This report delivers on that mandate and continues the work started with the ESRB Analytical Task Force (ATF) on the overlap between capital buffers and minimum requirements (ESRB, 2021).
Sharp eyed readers will notice that “USIT” is not the acronym for “Buffer Usability Simulation Tool” in any European language that we’re aware of.
Presumably this name was given to the project after someone noticed the problem at a late date, as neither of the meanings of “BUST” are going to be particularly appropriate in the context of bank supervision.
This sort of thing happens quite a lot. It was barely a few minutes after the launch of the Troubled Asset Relief Program that people noticed that a “TARP” is what you throw over something in a desperate attempt to cover up a catastrophic leak.
And the thought process of the (presumably all-male) committee which decided that the best name for a securities reporting standard would be the Unique Transaction Identifier (UTI) is lost to history.
Readers are invited to contribute their own examples of unfortunately named projects in the comments below (unfortunately, City University of Newcastle upon Tyne might be an urban legend).
