Sunday 21 January 2018

Rules on capital and liquidity agreed for banks

Deutsche Bank AG CEO Josef Ackermann. Photo: Bloomberg News
Deutsche Bank AG CEO Josef Ackermann. Photo: Bloomberg News

Simon Clark and Yalman Onaran

The group of governors and heads of supervision who oversee the Basel Committee on Banking Supervision said they reached a "broad agreement" on the "overall design" of new capital and liquidity rules for banks.

The central bankers and regulators agreed on a new 3pc leverage ratio to apply to banks globally, according to a statement today.

The ratio will be tested from 2013 until 2017, and banks would be required to start publishing their individual leverage figures starting in 2015. The cap could become binding as early as 2018, after possible adjustment to the method of calculating banks' assets.

The Basel board also accepted a final version of the committee's proposed definition of capital, while approving partial changes to the treatment of counter-party credit risk and the global liquidity standard.

They also agreed to publish an economic impact assessment of the new rule proposals in August.

"The agreements reached yesterday are a landmark achievement to strengthen banking sector resilience," Jean-Claude Trichet, president of the European Central Bank said.

Bankers including Deutsche Bank AG CEO Josef Ackermann and HSBC Holdings Plc Chairman Stephen Green have said that the new rules may force banks to reduce lending, potentially limiting economic growth.

Irish Independent

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