DMOs to Basel Committee: leave our bonds out of your buffers

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Plans for banks to hold government bonds as a buffer against a liquidity squeeze are under fire from an unexpected quarter - the debt offices that issue those securities. The new rules being drawn up by the Basel Committee on Banking Supervision would create extra, guaranteed demand for a vast amount of government debt - possibly north of $1 trillion, according to some estimates - and could therefore enable governments to borrow more cheaply or to run larger deficits. Debt managers see that as a

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